Unauthorised Lending
Finance ministry prepares draft bill to ban unregulated digital lending
This story was originally published at 07:34 IST on 20 December 2024
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NEW DELHI - The Department of Financial Services under the finance ministry has prepared a draft bill to ban unregulated digital lending activities. The department has sought views and suggestions on the proposed law from other departments and state governments by Feb. 13.
"The proposed bill envisages to ban all persons/entities not authorised by the RBI (Reserve Bank of India) / other regulators and not registered under any other law from undertaking public lending business activity," the ministry said in a circular. The bill also proposes to prohibit funding or promotional efforts supporting the unauthorised lending operations.
To enhance oversight and safeguard borrowers, the proposal involves establishing a regulatory authority that will be responsible for compiling a comprehensive registry of authorised lenders. The bill is based on the report submitted by the RBI's Working Group on Digital Lending, according to the circular.
Three years ago, the RBI had constituted a working group to curb unregulated lending and protect consumer interest. The group had submitted its report in November 2021. End
Reported by Krity Ambey
Edited by Ashish Shirke
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