HC strict on online platform distributing expensive loans, sought report from Reserve Bank

According to the petition filed in the court, at present more than 300 such mobile applications are working by the lenders who are giving short term loans at 1 percent per day interest on processing fee up to 35 percent.

Court strict on app distributing expensive loans

Taking advantage of the helplessness of the people, making them expensive loan ,loan) Online sharing platforms (online lending platforms) The High Court has taken a strict stand regarding this. The court has asked the Reserve Bank to file a status report in this matter. Actually the court (High Court) Wants to know about the measures to be taken to implement the report of a committee on these online platforms disbursing short term personal loans at extremely high rates. In fact, the court is hearing a PIL in this matter. In which there has been a demand to make rules to prevent unfair treatment of people in case of delay in repayment and giving loans at high rates through online platforms.

what is the court order

In its direction, the court said that the RBI should file a status report before the next hearing, explaining what steps have been taken to implement the report of the committee. In fact, before the court, the Reserve Bank had informed through a lawyer that suggestions have been sought from the people on the report. On this, the court has asked to file a status report. The next hearing in the case will be on July 20. These directions were given during the hearing on a PIL. During the hearing, advocate Prashant Bhushan, appearing for the petitioner, alleged that neither the government nor the Reserve Bank has taken any action on this report. According to him, the exploitation of the people by the debt-distributors is still going on.

what is the whole matter

In fact, the court was hearing a petition filed by a Telangana man, who has claimed that there are more than 300 mobile applications currently in operation which claim to give instant loans, with a tenure of 7 to 15 days, up to Rs 1500. Loan up to Rs 30,000 is being given. However, these platforms deduct 35 to 45 percent in the name of processing fee, platform fee, service charge etc. and transfer the remaining amount to the borrower’s account. On top of this, these platforms charge loans at the rate of 1 percent or higher every day. And these online platforms treat these people very badly if there is delay in repaying the loan even for a day. In the petition, there has been a demand to take action against these loan apps.

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