Amid rising concerns over fraudulent loan applications and predatory digital lending practices, the Government of India and the Reserve Bank of India (RBI) have introduced a series of strengthened measures to protect consumers and improve transparency in the fast-growing digital lending ecosystem.
Stronger Regulatory Framework for Digital Lending
The RBI had earlier constituted a Working Group on Digital Lending to examine the risks associated with online loan platforms and mobile-based lending apps. Based on its recommendations, the central bank rolled out comprehensive guidelines to regulate digital lending practices.
These norms aim to ensure:
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Greater transparency in loan processing
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Enhanced consumer data protection
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Clear accountability of regulated entities (REs)
All regulated entities are now required to strictly comply with these guidelines. The RBI is conducting regular supervisory checks, and any violations may attract corrective or enforcement action.
Crackdown on Fraudulent Apps
On the technology front, the Ministry of Electronics and Information Technology (MeitY) has intensified efforts to block illegal loan apps under Section 69A of the IT Act, 2000. These actions follow due legal procedures to curb misleading and unauthorized digital platforms, including those operated from overseas.
Authorities are also collaborating with internet platforms and messaging services to detect and remove fraudulent advertisements and apps in real time.
Verified App Directory for Users
In a major step towards transparency, the RBI launched a public directory of Digital Lending Apps (DLAs) on July 1, 2025. This allows users to verify whether a loan app is officially linked to an RBI-regulated entity, helping them avoid scams and unauthorized lenders.
Cybercrime Monitoring and Reporting
The Indian Cyber Crime Coordination Centre under the Ministry of Home Affairs is actively monitoring suspicious digital lending platforms.
Citizens can report fraud through:
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National Cybercrime Reporting Portal
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Helpline number 1930
Additionally, complaints related to illegal deposit or lending activities can be filed on the SACHET portal, supported by State Level Coordination Committees (SLCCs).
Awareness Campaigns to Educate Users
The RBI and banks have stepped up public awareness campaigns through SMS alerts, radio broadcasts, and outreach programmes. Initiatives such as e-BAAT aim to educate users about safe digital banking practices and the risks of cyber fraud.
Centre-State Coordination
While law enforcement remains under the jurisdiction of state and union territory governments—as “Police” and “Public Order” are state subjects—the Centre is providing policy guidance and financial assistance to strengthen cybercrime investigation capabilities.
The update was shared in the Rajya Sabha by Pankaj Chaudhary, highlighting the government’s continued push to create a secure and accountable digital lending environment.
