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RBI Cracks Down on Illegal Lending Apps with New Agency: DIGITA

The Reserve Bank of India (RBI) is stepping up its fight against cyber fraud with a powerful new weapon: the Digital India Trust Agency (DIGITA). This agency aims to tackle the growing menace of illegal lending apps that have been exploiting borrowers across the country.

Here’s how DIGITA will clean up the digital lending space:

Verification muscle: DIGITA will act as a gatekeeper, rigorously verifying digital lending apps before they can operate. This will weed out fraudulent and predatory apps that prey on unsuspecting borrowers.

Public register of trust: DIGITA will maintain a publicly accessible list of all verified lending apps. Apps without DIGITA’s "verified" stamp will be considered unauthorized, making it easier for you to identify safe and legitimate lenders.

Fighting financial crime: This verification process is a critical step in curbing cyber fraud in the digital finance world. By ensuring only legitimate apps operate, DIGITA aims to create a safer and more secure financial environment.

Why is this important?

The rise of digital lending apps has been accompanied by a surge in cyber fraud. These malicious apps often resort to:

  • Exorbitant interest rates: They charge borrowers unreasonably high interest rates, making it difficult to repay loans.

  • Harassment tactics: They employ aggressive and intimidating collection practices to pressure borrowers.
  • Data misuse: They mishandle borrowers’ personal data, putting them at risk.

A multi-pronged attack:

The establishment of DIGITA is just one part of the RBI’s plan. Here are some additional measures being taken:

RBI and IT Ministry join forces: The RBI has shared a list of 442 illegal lending apps with the IT Ministry to be removed from app stores.

Google cleans house: Google Play Store has already removed over 2,200 digital lending apps and now only allows apps from RBI-regulated entities or their partners.

The future of safe digital lending:

The combined efforts of DIGITA, stricter app store policies, and collaboration between government agencies paint a brighter picture for the future of digital lending in India. Borrowers can look forward to a safer and more transparent lending landscape where trust and security are paramount.

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