MUMBAI, Sept. 21 (Xinhua) -- India's central bank governor on Tuesday flagged concerns about the usurious interest rates, unethical recovery practices and data privacy issues led by the rising number of digital lending apps.
While these apps have served the needs of various segments, Governor of the Reserve Bank of India (RBI) Shaktikanta Das told a fintech conclave that he wanted to "flag certain material concerns regarding the unbridled mushrooming of digital lending apps."
"The need of the hour is to ensure assurance of safety after following a process of green-lighting (whitelisting) and due-diligence by the regulated entities," he said.
The RBI, in association with other relevant agencies, is taking steps to address this issue and take further steps as may be necessary, the governor said.
Earlier this month, the RBI came out with guidelines on digital lending with the stated aim to protect borrowers, allowing all loan disbursals and repayments to be executed only between the borrower account and regulated entities without the interference of lending service providers.
Assuring support for innovation and expecting the fintech ecosystem to focus on governance, business conduct, regulatory compliance and risk mitigation frameworks, Das said, "Robust internal product and service assurance frameworks, together with fair and transparent governance, will go a long way to safeguard the interest of customers and ensure the long-term sustainability of the fintech entities themselves."
Media reports said that last year search engine Google removed over 2,000 digital lending apps from its play store after the Indian government directed it to introduce more stringent checks to help curb the use of illegal digital lending apps and weed them out. ■
