The Delhi High Court has issued notice in a public interest litigation filed seeking a direction to the Reserve Bank of India to regulate online digital lending applications and platforms charging exorbitant interest on loan from borrowers.
Hearing the petition through video conferencing, the division bench of Chief Justice D.N. Patel and Justice Jyoti Singh issued notice. The PIL has been filed by Dharanidhar Karimojji alleging that un-regulated platforms are offering and providing loans to the needy through online apps. They deduct almost 30% to 45% of loan money as platform fees, processing fees, etc. and transfer the remaining money to the borrower’s bank accounts.
The Counsel for the petitioner submitted, “A caution note was also circulated by the Reserve Bank of India on December 23, 2020,” with regards to these unauthorised digital lending platforms/ mobile apps promising quick digital loans.
“These platforms promise quick loans and is a business of tens of thousands of crores with interest ranging from 1% per day to 1.50% per day,” the counsel added.
The petition has sought directions:
i. To regulate and control the working of online digital lenders doing business through mobile app or any other platform;
ii. To stop charging exorbitant interest on the loan from borrowers;
iii. To stop harassment of borrowers from recovery agents of online digital lenders;
iv. To fix the maximum rate of interest chargeable by online digital lenders;
v. To set up a grievance redressal mechanism for borrowers in every state, to resolve the problems they face from online digital lending app operators or their agents, within a specific time.