Swift economic recovery may limit banking sector's loan losses
Swift economic recovery may limit banking sector's loan losses
Image by InspiredImages from Pixabay

Short term loans from mobile applications may look appealing and really helpful, but they are also dangerous and ruthless when it comes to recovery. The fintech apps, that offer quick loans, usually aren't registered with the Reserve Bank of India and hence do not follow any guidelines or protocols set by the law. It is believed that due to the constant harassment of these online loan apps, a number of people took the extreme step of ending their lives, one of them being a television series writer of a popular show.

Last year in November, a television series writer, Abhishek Makwana, 37, was found hanging from a ceiling fan at his Kandivali residence. Makwana had left a suicide note, in which he mentioned that he was facing financial troubles, as well as personal, due to which he was ending his life. Furthermore, when the family checked the writer's emails and bank details, they alleged that he had taken short term loans from online apps and they were harassing him over payments, which subsequently pushed him off the ledge. While Charkop Police have approached the bank to find leads, they are yet to register any FIR.

Explaining the modus operandi of these online loan apps, a police officer said, these fintech apps target youth between 18-40 years on social media, luring them with an interest rate of only 0.98 percent. The advertisement, however, leaves out that this interest will be calculated per day, which takes the annual interest at a much higher number, while charging the borrowers for processing fees as well.

Public shaming by recovery agents

Surprisingly, when these apps are downloaded, they mandatorily require access to your contacts, video and photo gallery. Once the access is given, you have to share your PAN card and Aadhaar details, which make the borrower very vulnerable for frauds, said an official. The app representatives also access the contacts, photo gallery and messages, following which they send publicly shaming messages to all on the borrower's list.

The online loan apps, which were on a rife well before the Novel Coronavirus pandemic hit the world, had lured financially vulnerable youths claiming that money will be transferred almost instantly, unlike other registered fintech apps. The borrowers, who fall deep in this pit, have to face the threats, social shaming and harassment by the hands of these apps, said an officer.

Jyotika Thakkar, 27, a call centre employee said, "I had taken a loan from one of these apps available in the PlayStore, and after the pandemic induced lockdown was put in place, I was laid off. When I was unable to repay the loan for a month, the lenders had called my brother and friends, informing them that I had defaulted a payment and if I'm unable to pay, they will be held responsible."

Police says

Last month, Mulund Police and Deputy Commissioner of Police (Zone 7) Prashant Kadam had foiled a suicide bid of a man, who was contemplating ending his life due to credit card dues on Friday. The man, a Mulund resident, was saved in the nick of the time after his wife alerted a retired cop, who then told a social activist.

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