{"id":270619,"date":"2023-11-22T20:39:35","date_gmt":"2023-11-22T15:09:35","guid":{"rendered":"https:\/\/forumias.com\/blog\/?p=270619"},"modified":"2023-11-22T20:39:35","modified_gmt":"2023-11-22T15:09:35","slug":"on-fraudulent-digital-lending-rbi-loan-scammers-and-financial-literacy","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/on-fraudulent-digital-lending-rbi-loan-scammers-and-financial-literacy\/","title":{"rendered":"On Fraudulent Digital Lending \u2013 RBI, loan scammers and financial literacy"},"content":{"rendered":"

Source:<\/strong> The post on Fraudulent Digital Lending has been created based on the article \u201cRBI, loan scammers and financial literacy<\/strong>\u201d published in \u201cIndian Express\u201d<\/strong> on 22nd November 2023.<\/p>\n

UPSC Syllabus Topic:<\/strong> GS Paper 3 Indian Economy – Indian Economy and issues relating to mobilization of resources.
\nGS Paper 3 Internal Security \u2013 Basics of cyber security.<\/p>\n

News:<\/strong> The article discusses the issues associated with fraudulent digital lending apps. It highlights the reasons for people falling for the scams, and the variou steps taken in this regard.<\/p>\n

In recent years, there has been an expansion of the digital economy in India. This has created conditions for a surge in digital lending, driven by fintech companies.<\/p>\n

For more on Digital Lending<\/strong>, read here<\/a>.<\/p>\n

Why do people fall for fraudulent digital lending?<\/strong><\/h2>\n
    \n
  1. Inducement of access to easier and faster low-cost loans.<\/li>\n
  2. Promise lending to people with low credit scores.<\/li>\n
  3. Provide loans to people with limited access to financial services.<\/li>\n
  4. Low levels of financial literacy (amongst the low- and middle-income classes, including students and shopkeepers in smaller towns).<\/li>\n<\/ol>\n

    What steps have been taken in this regard?<\/strong><\/h2>\n
      \n
    1. RBI working group had suggested the creation of an independent body to verify digital lending apps.<\/li>\n
    2. Ministry of Electronics and Information Technology (MeitY) was allotted the responsibility of ensuring that only legitimate apps are hosted on the app stores.<\/li>\n
    3. Tech platforms (which host lending apps) such as Google and Apple have blocked several such apps.<\/li>\n<\/ol>\n

      What needs to be done?<\/strong><\/h2>\n
        \n
      1. Regulatory Measures: <\/strong>Implementing strict regulations specifically targeting digital lending platforms to ensure compliance with existing financial and consumer protection laws should be done. KYC norms for lending apps<\/strong> as suggested by MeitY can be put in place.<\/li>\n
      2. Monitoring and Oversight: <\/strong>Establish a regulatory body or task force dedicated to monitoring digital lending practices, investigating complaints, and taking necessary actions against illegal operators.<\/li>\n
      3. Consumer Awareness and Protection: <\/strong>Public awareness campaigns to educate consumers about the risks associated with illegal digital loan apps with an emphasis on financial literacy should be launched.<\/li>\n
      4. Use of Technology: <\/strong>Developing technology solutions to verify the authenticity of digital lending platforms and prevent unauthorized access to personal data can be done.<\/li>\n
      5. Collaboration with Financial Institutions:<\/strong> Partnerships between legitimate digital lenders and established financial institutions or banks to ensure responsible lending practices should be encouraged.<\/li>\n<\/ol>\n

        Question for practice:<\/strong><\/p>\n

        Financial inclusion and financial literacy are important pre-requisites for unleashing the potential of India\u2019s digital economy. Discuss in the context of fraudulent digital lending apps.<\/p>\n

         <\/p>\n","protected":false},"excerpt":{"rendered":"

        Source: The post on Fraudulent Digital Lending has been created based on the article \u201cRBI, loan scammers and financial literacy\u201d published in \u201cIndian Express\u201d on 22nd November 2023. UPSC Syllabus Topic: GS Paper 3 Indian Economy – Indian Economy and issues relating to mobilization of resources. GS Paper 3 Internal Security \u2013 Basics of cyber… Continue reading On Fraudulent Digital Lending \u2013 RBI, loan scammers and financial literacy<\/span><\/a><\/p>\n","protected":false},"author":10320,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1230],"tags":[216,8184,10500],"class_list":["post-270619","post","type-post","status-publish","format-standard","hentry","category-9-pm-daily-articles","tag-gs-paper-3","tag-indian-economy","tag-indian-express","entry"],"jetpack_featured_media_url":"","views":{"total":2,"cached_at":"","cached_date":1700696806},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/270619","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10320"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=270619"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/270619\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=270619"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=270619"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=270619"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}