Measures taken by the government and RBI to strengthen digital lending ecosystem highlighted

Focus on curbing the operations of unauthorised digital loan apps

The government has been constantly engaging with the Reserve Bank of India (RBI) and other concerned regulators/stakeholders to curb the operations of unauthorised digital loan apps in the country. For public information, RBI operationalised a directory, ‘Digital Lending Apps (DLAs)’, on its website earlier this year, comprising all DLAs deployed by Regulated Entities (REs) of RBI. The directory aims to aid customers in verifying the claim of a DLA’s association with a RE.

In the case of unauthorised digital loan apps being identified, the Ministry of Electronics and Information Technology (MeitY) is empowered to issue directions for blocking of information for public access under Section 69A of Information Technology (IT) Act, 2000 after following the due process as provided in the Information Technology (Procedure and Safeguards for Blocking for Access of Information by Public) Rules, 2009.

Further, the government and RBI have been taking up various initiatives from time to time to protect citizens from exploitation by unauthorised loan apps. 

These inter-alia, include:

* RBI issued the Reserve Bank of India (Digital Lending) Directions, 2025 in May, which have detailed provision regarding recovery, data privacy and customer grievance redressal mechanisms that are mandatory for the REs, the Lending Service Providers (LSPs) engaged by them and the Digital Lending Apps (DLAs).

* Proactively engaging with the major internet intermediaries and messaging platforms to review the operations of unauthorised loan apps.

* Indian Cyber Crime Coordination Centre (I4C), Ministry of Home Affairs (MHA), has been proactively analysing the digital lending apps. In order to facilitate citizens to report cyber incidents, including illegal loan apps, MHA has launched a National Cybercrime Reporting Portal (www.cybercrime.gov.in) as well as a National Cybercrime Helpline number “1930”.

* Banks, through the public facing platform ‘SACHET’ portal and the inter-regulatory State Level Coordination Committee (SLCC), facilitate citizens in lodging complaints against specific entities related to deposit/collection of money illegally.

* RBI and banks have been taking up awareness campaigns through short SMS, radio campaign, and publicity on prevention of ‘cyber-crime’. Further, RBI has been conducting electronic banking awareness and training (e-BAAT) programmes that focus on awareness about frauds and risk mitigation.

This information was given by the Union Minister of Finance, Mrs Nirmala Sitharaman, in reply to a question in the Lok Sabha, informed an official communique.

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