Government and RBI Took Measures to Curb Fraudulent Loan Apps

The Reserve Bank of India (RBI) had earlier constituted a Working Group on Digital Lending, covering loans provided through online platforms and mobile applications. Following the Group’s recommendations, RBI has issued regulatory guidelines aimed at strengthening the framework for digital lending, including mobile app-based loans, while enhancing customer protection and ensuring a safe and sound digital lending ecosystem.

All Regulated Entities (REs) are required to adhere to these guidelines. Compliance is assessed on a sample basis during supervisory reviews, and any observed violations are addressed through corrective measures, in addition to supervisory or enforcement action, as deemed appropriate.

Blocking Fraudulent Loan Apps

The Ministry of Electronics and Information Technology (MeitY) has the authority to block access to information, including fraudulent loan apps, under Section 69A of the Information Technology Act, 2000. The blocking process is carried out following the procedures outlined in the Information Technology (Procedure and Safeguards for Blocking for Access of Information by Public) Rules, 2009.

Government and RBI Initiatives to Protect Citizens

To protect users from exploitation by unauthorised digital lending apps, the Government and RBI have implemented several measures:

1. Digital Lending Apps Directory: Since July 1, 2025, RBI has maintained a directory of Digital Lending Apps (DLAs) on its website, listing all apps deployed by its regulated entities. This enables customers to verify whether a DLA is legitimately associated with an RE.
2. Collaboration with Internet Intermediaries: RBI actively engages with major internet platforms and messaging services to review the operations of unauthorised loan apps. Internet intermediaries are instructed to implement stringent technology-driven vetting and real-time enforcement mechanisms to detect and block malicious advertisements of illegal loan apps, particularly those originating from offshore entities.
3. Cybercrime Monitoring and Reporting: The Indian Cyber Crime Coordination Centre (I4C) under the Ministry of Home Affairs monitors digital lending apps for potential fraud. Citizens can report cyber incidents, including illegal loan apps, via the National Cybercrime Reporting Portal (www.cybercrime.gov.in) or through the helpline number 1930.
4. Complaint Redressal via Banks and SLCC: Banks, through the public-facing ‘SACHET’ portal, and inter-regulatory State Level Coordination Committees (SLCC) facilitate lodging complaints against entities involved in illegal deposit collection or lending activities.
5. Awareness Campaigns: RBI and banks run awareness initiatives through SMS, radio campaigns, and other publicity measures, focusing on cybercrime prevention and risks associated with illegal loan apps. Additionally, the RBI conducts electronic banking awareness and training programs (e-BAAT), educating citizens on fraud prevention and risk mitigation in the digital finance space.

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