2024-05-27 By Surbhi Chauhan News

RBI Considers forming Digital India Trust Agency (DIGITA) to action Illegal Lending Apps

The Reserve Bank of India (RBI) is planning to establish a public registry of approved lending apps to fight the increase of illegal lending apps in the country. As part of this initiative, the central bank is looking to create a new agency, the Digital India Trust Agency (DIGITA), which will be responsible for verifying digital lending apps and maintaining a public register of those that have been verified.

DIGITA, upon its launch, will be tasked with vetting digital lending apps. Apps that do not support the 'verified' signature of DIGITA will be deemed unauthorized for legal purposes, according to sources. This measure will serve as a crucial step in the fight against financial crimes in the digital sector.

The Digital India Trust Agency is a welcome move for the industry. It will play a critical role in building credibility and accountability within India's rapidly expanding digital lending sphere by ensuring that homegrown lending apps are managed properly.

The Reserve Bank of India (RBI) has provided a list of 442 verified digital lending apps to the IT Ministry to whitelist with Google. In response to growing concerns about fraudulent lending apps, Google has taken major action by removing over 2,200 digital lending apps from its Play Store between September 2022 and August 2023.

Google has also updated its policy on loan apps, now allowing only those apps published by entities regulated by the RBI or those partnered with such entities to be available on the Play Store. This policy change was implemented following requests from the RBI and the Department of Financial Services (DFS) under the Finance Ministry.

These steps are part of a broader effort to ensure consumer protection, curb cyber fraud, and eliminate unauthorized lending apps from the digital marketplace.