In a big crackdown on digital lending after rising number of complaints and fraud the Reserve Bank of India cancelled licenses for 5 non-bank financiers. The RBI stated that these NBFCs were engaged in digital lending were in violation guidelines.
These non-banking financial companies (NBFCs) used to run apps and service providers like Fastapp Technologies Private Ltd, Datimes Pvt Ltd, Bullintech Finance Pvt Ltd, TGHY Trustrock Pvt Ltd, Mrupee, Kush Cash, Karna Loan, Mr Cash, FlyCash, More, Wifi Cash, Badabro, Aeritech Pvt Ltd, Finclub Technologies Pvt Ltd, MoNeed, MoMo, CashFish, Kredipe, RupeeLand and Rupee Master.
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The action comes as the central bank has repeatedly warned customers against the questionable digital money lending entities that promise loans in seconds. Some of the lending apps under the lens have been charging exorbitant rates of interest on 'instant loans', and then use muscle powers to recover dues.
Digital lending has seen a more than twelvefold increase in India from 2017 to 2020, according to a November 2021 report by the Reserve Bank of India.
Sachet, a portal to file complaints with the RBI, received 2,562 complaints of lending apps promoted by unregulated entities between January 2020 and March 2021. Google Play store had removed over 205 such apps as of November 2021.