Borrowing loans through mobile apps? Beware of interest rates
India Today
A PIL was filed seeking regulation of online lending platforms offering short-term personal loans at exorbitant interest rates through mobile apps, and allegedly humiliating and harassing people in case of delay in repayment.
You may come across a number of online lending platforms which offer instant loans through mobile apps. The Delhi High Court has asked the Reserve Bank of India (RBI) to file a status report on the steps taken for implementation of a committee's report to look into the issue of these online lending platforms offering short-term personal loans at exorbitant interest rates through mobile apps, according to a PTI report.
A bench of Acting Chief Justice Vipin Sanghi and Justice Navin Chawla was informed by senior advocate V Giri on Wednesday, representing the RBI, that the report of the committee is under circulation for inviting comments of the public at large.
The court said, “let the respondent file a status report on the steps taken for implementation of the report before the next date of hearing”. It listed the matter for further hearing on July 20.
The court was hearing a PIL seeking regulation of online lending platforms offering short-term personal loans at exorbitant interest rates through mobile apps, and allegedly humiliating and harassing people in case of delay in repayment.
During the hearing, advocate Prashant Bhushan, appearing for the PIL petitioner, said nothing has been done by the government or RBI even after getting the committee's report and added that the menace was continuing.
The court was hearing the petition filed by Telangana-based Dharanidhar Karimojji, who works as a freelancer in digital marketing, claiming there are more than 300 mobile applications that provide instant loans ranging from Rs 1,500 to Rs 30,000 for 7 to 15 day periods.
However, these money lending platforms deduct almost 35 per cent to 45 per cent of the loan as platform fees, service charges, or processing fees and only transfer the remaining money to the borrower's bank accounts, the petition has said.
