Zee Business’ initiative ‘Operation Hafta Vasooli’ is yielding positive results as the Reserve Bank of India (RBI) has set rules for the lending apps in accessing users’ personal information and preventing their harassment. A two-part series of sting operations, the Operation Hafta Vasooli was done to unravel how loan apps fetch their customers’ personal data, contacts, pictures and use them to harass and blackmail them for money.
Zee Business Managing Editor Anil Singhvi also met the RBI Governor Shaktikanta Das to discuss many of these issues and requested him to intervene in the matter.
What are the new rules framed by the RBI for lending apps?
- The loan apps will have to disclose their lending license to the RBI
- The app description will have to share information on registered bank or non-banking financial company (NBFC)
- The app description is mandatory for lending platforms
- Loan apps won’t be able to access personal data
- Loans apps will also have to provide the name of their funding partners and register them with the RBI
RBI takes action against Rhino Finance Pvt Ltd
The RBI recently cancelled the registration of Guwahati-based Rhino Finance Pvt. Ltd due to irregularities and violation of rules. “The company was also not complying with the extant regulations pertaining to charging of excessive interest and had resorted to undue harassment of customers for loan recovery purposes,” the RBI said. Rhino Finance was running lending apps such as Hello Loan, Credithub, KoKo Cash, Flash Loan, Bridge Loan, Crazy Bee and Rupee Bus.
In 2022, RBI cancelled the license of five entities – UBM Securities, Anashri Finvest Ltd, Chadha Finance Ltd, Alexcy Tracon and Jhuria Financial Services Pvt. Ltd – running fake loan apps such as mRUPEE, Kush Cash, FlyCash, MoNeed, WiFi Cash and others. These firms were on the radar of the RBI as they were giving loans to customers through third parties.
RBI had also cancelled the license of PC Financial last year which was running the app “CashBean”. At that time, the RBI had 137 fake loan lenders under its scanner. Although the majority of non-compliant online lending applications have been stopped by the authorities, unscrupulous actors in the ecosystem of digital lending may still be active.