Sreya Kanugula
The High Court of Delhi issued a notice to the Central government and the Reserve Bank of India on their stand upon a plea that sought the regulation of digital lending platforms.
The bench comprising Justices D N Patel and Jyoti Singh issued the Centre, notice upon this writ petition and asked for a reply to be filed by 19th February 2021.
The filed petition gave reference to an RBI circular with the date 23rd December 2020 on it, which cautioned against all unauthorized platforms that offer digital lending services and it pleaded for regulation on the working of these lenders through applications on mobile and other sources of media as well.
The petition also focused on the exorbitant interests charged on loans by the lenders who provide such services and sought for fixing the maximum interest rate that could be charged by them as a possible solution.
Setting up a mechanism in every state for readdressing grievances for people who borrow from such services was also asked for.
In the petitioner’s plea it was stated that “as of today, there are around 300 instant personal loan apps”, which “give loans ranging from Rs.1500/ to 30,000/- for about 7 to 15 days’ tenure. They deduct almost 35% to 45% of loan money as platform fees /service charges/processing fees and transfer remaining money to the borrower’s bank accounts.”
The advocate representing the petitioner, Mr. Prashant Bhushan also told the bench that digitally lending entities such as these posed a great menace and the RBI’s circular released in December, cautioned the common people against them, supported the petitioner’s argument.