The Delhi High Court on Wednesday was informed that the Reserve Bank of India has already initiated the process in respect of regulation of digital lending including lending through online platforms and mobile application.
The Division Bench comprising Acting Chief Justice Vipin Sanghi and Justice Navin Chawla was dealing with a plea seeking regulation of online lending platforms on the ground that these platforms are exploiting borrowers by charging exorbitant interest on loans.
During the course of hearing, Senior Advocate V. Giri, appearing on behalf of RBI, submitted that the Report of the Working Group on Digital Lending including lending through Online Platforms and Mobile Apps is under circulation for inviting comments from the public at large.
In light thereof, the Bench granted time to the regulatory body to file a status report with regard to the steps taken for implementation of the said report and posted the matter for 20 July, 2022.
The instant Public Interest Litigation was filed by Advocate Prashant Bhushan on behalf of one Dharanidhar Karimojji, alleging that un-regulated platforms are offering and providing loans to the needy through online apps.
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The plea claimed that these platforms deduct almost about 30% to 45% of loan money as platform fees, processing fees, etc., and only transfer the remaining money to the borrower’s bank accounts. The plea further claimed that these platforms charge exorbitant interest rates of 1% or more per day on the quick loans advanced by them to the borrowers.
In this regard, the petition sought regulation and control on the working of online digital lenders doing business through mobile apps or any other platform; and a direction for stopping the practice of charging exorbitant interest on the loan from borrowers.
In addition, the plea sought a curb on harassment of borrowers at the hands of recovery agents of online digital lenders; and a fixation of maximum rate of interest that could be charged by online digital lenders.
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It further prayed for setting up of a grievance redressal mechanism for borrowers to resolve the issues faced from online digital lending app operators or their agents within a specific time.
Notices were issued in the matter in January last year.
Pursuant to the issue came before the Delhi High Court, RBI constituted a committee to suggest ways and means to regulate these platforms which submitted its report in November last year. The final process will be shaped after considering inputs on the report from the public at large.
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