A petition has been filed before the High Court of Delhi referring to a memorandum provided by the Reserve Bank of India which advises against unregulated digital lending platforms and requests for supervision and control of the work of online digital lenders using smartphone applications and other media.
Contention of the Petitioner
1. There is currently no uniform regulation to govern online digital lending platforms or to restrict the maximum rate of interest or other miscellaneous fees and costs that are being charged by digital lending platforms.
2. The digital lending agencies are abusing customers by charging extremely high rates of interest on loans, some that amount to 365 percent per year.
3. The digital lending platforms further threaten and harass consumers in the event of default of payment.
4. Both the circulars presented by the Reserve Bank of India and the State Money Act were not being properly enforced and implemented.
5. Several online digital lending platforms operate under the ambit of Non-Banking Financial Companies that are governed by the Reserve Bank of India and claimed that the authority is not regulating the exorbitant rates of interest and miscellaneous charges that are being levied by these platforms and restraining them from exploiting consumers.
1. To seek clarification on the regulation of online lending platforms.
2. The creation of a grievance resolution mechanism for borrowers in each State to address the problems they face from digital lending platforms.
The High Court of Delhi passed a notice in a petition requesting the oversight and control of digital lending platforms within the country, the Central Government was instructed to report its address of the petition by the 19th of February.