Supreme Law News

Are you a victim of Covid-19 Goonda Raj? Part-2

Digital lenders tamed on our complaint
Have you taken a loan from any App based loan Companies and are being harassed for being not able to pay them during this pandemic time? If so, there is good news for you, now they can’t harass you anymore.

Let’s find our why and how?
Friends, in my previous article I have raised the issue of outrageous rate of interest being charged by China backed loan lending apps and excessive use of muscle power and bullying tactics to recover the loans.

Use of personal data and information to blackmail the customers and many such illegal means to recover the loan.

In this regard, I wrote to Prime Minister of India, as well as various other concerned ministers, including India’s Finance Minister, Home Minister, IT Minister, I&B Minister and Consumer Affairs Minister and raised the issue through social media, asking the government to take stern action against these Fintech Companies, mostly backed by China.

These Chinese companies entered into Indian market through backdoor, after being banned in China, for their unethical and illegal business practices and were playing havoc with customers in India.

Finally, the government has decided to act and has announced a host of guidelines to rein these unruly Fintech Companies.

Disclose bank’s name on the app

These companies used to operate without any disclosure, name and address but now it is mandatory for them to disclose all relevant information on their websites. This discloser will help the consumers to take action against these companies in case of any dispute, which was not possible so far.

It came to forefront during the loan moratorium period because most borrowers from digital lending platforms didn’t know whether they will get the loan moratorium or not. The requests for loan moratorium were rejected by these digital lenders.

Similarly, digital lending platforms have been asked to inform their customers upfront about the names of banks/ NBFCs on whose behalf they are disbursing loans.

This information has to be shared irrespective of whether banks or NBFCs lend through their own digital lending platform or through an outsourced lending platform.

Furnish sanction letter and loan agreement to customers

RBI now also wants to have a sanction letter issued to the borrower on the letterhead of the bank / NBFC concerned while applying for the loan. Also, a copy of the loan agreement shall be furnished to all borrowers at the time of sanction/ disbursement of loans.

I hope these measures will help the consumers to a large extent but I will still recommend to take loan from established and reputed banks by visiting the branch.

In case of any harassment now you have a weapon to lodge a police complaint and take action against these companies.

Last but not least, do no forget as a consumer, you too have your right and lending agencies just can’t barge into your house and in your personal data to recover the loans or charge exorbitant rate of interest. So, if you have any such problem do consult your local lawyer.

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Dr. Ajay Kummar Pandey

( LLM, MBA, (UK), PhD, AIMA, AFAI, PHD Chamber, ICTC, PCI, FCC, DFC, PPL, MNP, BNI, ICJ (UK), WP, (UK), MLE, Harvard Square, London, CT, Blair Singer Institute, (USA), Dip. in International Crime, Leiden University, the Netherlands )

Advocate & Consultant Supreme Court of India, High Courts & Tribunals.