Delhi High Court Seeks RBI's Response Over NBFCs Violating Digital Lending Rules

The Delhi High Court has issued a notice to the Reserve Bank of India (RBI), Union Government, Google LLC, and Apple India Private Limited in response to a public interest litigation (PIL) alleging violations of RBI's digital lending guidelines by several NBFC-backed applications, as per The Live Law report. 

The plea seeks action against irregular data collection and coercive consent practices. 

Delhi HC Examines Alleged Breach of Digital Lending Norms 

On May 8, 2025, RBI had issued guidelines prohibiting Digital Lending Applications (DLAs) from accessing mobile device resources such as contact lists and call logs.  

The rules allow limited, one-time access to location, microphone, and camera strictly for Know Your Customer (KYC) purposes, based on explicit consent. 

A PIL filed by Himakshi Bhargav claims numerous NBFC-backed DLAs continue to collect unauthorised data and impose coercive consent clauses, violating borrowers' privacy rights. 

Applications named include Slice, Branch, Navi, Home Credit, Simpl, Dhani, Refyne, ZestMoney, Freo Pay, and LendingPlate. 

Developer Platforms in Spotlight as RBI's Role Questioned 

The plea alleges that despite bringing these violations to RBI’s attention, there has been no visible enforcement or public response. The petitioner claims that these apps remain accessible on major platforms like Google Play Store and Apple App Store even after multiple complaints. 

The Delhi High Court bench comprising Chief Justice DK Upadhyaya and Justice Tejas Karia has now asked for RBI's response, alongside that of the Central Government and the app platforms. The PIL seeks cancellation or suspension of licences of the non-compliant entities. 

Read More: RBI Tightens Related-Party Lending Norms with Transaction-Level Thresholds! 

Petitioner Demands Transparency and Regulatory Action 

The plea further seeks a mandate for RBI to disclose details regarding the number of digital lending platforms found non-compliant and to publish the action taken reports (ATRs) along with compliance reviews conducted since the issuance of the guidelines in 2025.  

Legal representation for Bhargav is provided by advocates Kunal Madan, Manmay Sarawagi, Yugal Jain, and Teena. 

Conclusion 

The Delhi High Court’s notice marks a step towards stricter enforcement of RBI's digital lending guidelines. The case places regulatory and platform accountability in focus, particularly regarding data protection and borrower rights preservation. 

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