RBI mulls setting up digital agency to check illegal lending apps

New Delhi, March 31

Advertisement

As part of its efforts to curb growing cyber fraud, the Reserve Bank is considering establishing a Digital India Trust Agency (DIGITA) to stop the mushrooming of illegal lending apps.

The proposed agency will enable verification of digital lending apps and maintain a public register of verified apps, sources said.

Apps not carrying the ‘verified’ signature of DIGITA should be considered unauthorised for the purpose of law enforcement, sources said, adding this would serve as a pivotal checkpoint in the fight against financial crimes in the digital realm.

DIGITA, once in place, would be entrusted with the responsibility of vetting digital lending apps, they noted.

According to sources, a thorough verification process would help instil greater transparency and accountability within the growing digital lending sector, which has witnessed a surge in fraudulent activities and unscrupulous practices in recent times.

Meanwhile, the Reserve Bank of India has shared a list of 442 unique digital lending apps with the IT Ministry to whitelist with Google.

Besides, Google has removed over 2,200 digital lending apps from its app store from September 2022 to August 2023.

The search giant has updated its policy regarding the enforcement of loan apps on the PlayStore, and only those apps are allowed which are published by the RBI’s regulated entities (REs) or those working in partnership with REs.

This policy change by Google has happened at the request of the Reserve Bank of India (RBI) and the Department of Financial Services (DFS) under the Finance Ministry.