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The Reserve Bank of India (RBI) and the Government of India have announced new measures to address the issue of fraudulent digital loan applications operating in the country. The initiative aims to strengthen the regulatory framework for digital lending and improve protection for borrowers using online lending platforms. The measures follow recommendations from an RBI working group that examined digital lending through online platforms and mobile apps. Based on these recommendations, RBI introduced guidelines for digital lending to ensure that financial institutions offering loans through apps follow regulatory standards. According to the government, the framework is intended to make the digital lending ecosystem more transparent while protecting consumers from unauthorized loan applications.

Under the guidelines issued by RBI, all regulated entities must follow specific rules when offering loans through digital platforms, including mobile apps and online portals. Compliance with these rules is reviewed through supervisory assessments conducted by the central bank. If any violations are found during these checks, RBI may take supervisory or enforcement action against the entities involved. Such actions may include directing companies to correct compliance issues or initiating regulatory measures where required. The Ministry of Electronics and Information Technology (MeitY) has also issued directions to block fraudulent loan apps. These actions are carried out under Section 69A of the Information Technology Act, 2000 following the procedures defined in the Information Technology Rules, 2009.

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