RBI Looks To Reign In On Illegal Lending Apps With Anti-Fraud Agency: Report

The Reserve Bank of India, which in many ways is the banker of the country is considering the creation of a platform to scrutinize illicit online lending. In order to truncate the fraud activities, that are carried out online, the Central Bank is said to be mulling over the creation of a Digital India Trust Agency (DIGITA).

The main mission of the agency would be to curb illegal lending that is done online.

In 2020-2021, when the Covid-19 pandemic was in its full force, online lending apps occupied he vacuum left joblessness and the scarcity that followed soon.

Fraud of Online Lenders

The proposed agency would impose the requirement of verification of digital lending platform. This would allow in the creation and maintenance of a public register of verified apps.

This is done to induce greater transparency and accountability within the growing digital lending sector.

Given Google's Play Store and its search engine's importance in the sector, the American search engine giant in collaboration with the Indian authorities has relinquished as many as 2,200 digital lending apps from its play store from September 2022 to August 2023.

In addition the Alphabet-owned company has updated its policy regarding the enforcement of loan apps. In accordance to this rule will be available to those apps that adhere to the norms of the Central Bank.

DIGITA's Potential Mission

According to reports emerging on the matter, apps lacking the verified signature of DIGITA should be deemed unauthorized for law enforcement purposes. The online paradigm, given the added access and reach of internet has lead to an unfortunate surge in fraud cases.

This measure is expected to establish a safer space for digital financial activities to happen.

This is crucial given how more often than not, this ills of the system affect and in fact adversely impact the one in dire need of resources and who are strained by their lack of financial mobility.