The Reserve Bank of India will soon come out with regulatory architecture for digital lending platforms, many of which are unauthorised and illegal, Governor Shaktikanta Das said on Thursday.
There have been increasing cases of alleged suicides of borrowers due to harassment by a few of the operators of digital lending apps. “I think very soon we will be coming out with a broad regulatory architecture, which should be able to address the challenges that we are confronted with regard to lending through digital platforms, many of which are unauthorised, unregistered and, should I say, illegal,” Das said while delivering a lecture on – Indian Businesses (Past, Present and Future).
He was speaking at the Iconic Week celebration as part of the ‘Azadi Ka Amrit Mahotsav’ to mark the 75th anniversary of Independence, organised by the Central Board of Indirect Taxes and Customs (CBIC). Das on Wednesday suggested that customers borrowing from unregistered digital lending apps should approach the local police in case of any issue. Most of the digital lending apps are not registered with the central bank and operate by themselves, he told reporters after announcing the monetary policy.
Das said whenever it gets a complaint from any customer, the central bank directs customers of such unregistered apps to approach the local police, which will conduct an investigation and take necessary action on the issue “It is my humble request to all those using such apps to first check if the app is RBI registered or not. If the app is RBI registered, the central bank will act immediately in case of any misdoing, I assure you,” he had said.
The governor on Thursday said the RBI does recognise the role of existing as well as emerging businesses for economic progress. The long-term success of any business is directly linked to its quality of governance, internal control systems and the robustness of its risk and the organisational culture, he noted. The central bank has been pushing for improvements in the governance and compliance culture of its regulated entities like banks, NBFCs and other financial entities through a series of measures, Das said.