Friday, March 1, 2024
HomeNewsLatest Legal NewsSC declines to consider a request for regulation of digital money lending,...

SC declines to consider a request for regulation of digital money lending, “It Is For The RBI To Decide.”

The Supreme Court bench comprised of Justice D.Y. Chandrachud and Hima Kohli did not allow the written petition regarding giving guidelines and directions to the Reserve Bank of India for the purpose of regulating digital money lending platforms.

While allowing the petitioner to pursue a representation before the RBI, the bench made the observation that it is up to the RBI to determine if any action is required.

The petitioner requests a directive from the Reserve Bank of India under Article 32 of the Constitution to take action to regulate or shut down unauthorised money lending platforms; to create guidelines to ensure oversight over digital money lenders and for banks and NBFCs that are participating in the digital lending platforms; and to protect user personal data.

The bench stated that, “the bench gives the petitioner permission to approach the RBI with this regard. The RBI shall determine what the required action is and, if so, what that action will be. ” The petition is dismissed without prejudice to the petitioner’s right to appeal.

The new RBI rules will guarantee a defined and unambiguous set of guidelines for digital lenders to follow when working with consumers and protect them from dishonest loan operators or subpar industry practises, making it safe and sustainable for all parties involved.

It won’t only be a technology-driven convenience model for digital lending anymore. Instead, it would develop into a multi-layered system based on the basics of banking, putting the interests of the consumer first and making organised credit more accessible while also increasing transparency.

The RBI’s new guidelines for digital lending will safeguard the interests of borrowers by requiring that credit transactions be carried out through transparent, compliant apps. Borrowers will also be further protected by the provision for the appointment of a nodal grievance redressal officer, which will facilitate their continuous ability to voice complaints.

By requiring that digital lenders give their customers the option to accept, decline, or assent to requests to access their information and limiting it to only that particular information necessary for a loan, data privacy for customers will also be improved.

Dinero’s Vice President of Product and Chief of Staff, Anurag Reddy, claims: “In accordance with international standards like the GDPR and our draught personal data protection bill, the rules around user consent for the preservation and use of personal data. Even before it is required by legislation, RBI is ensuring that the ecosystem of financial services and fintech remains at the forefront of protecting sensitive personal data. The rules will also cause the environment to be cleaned up. Lending operations with good intentions will prosper. Whether it’s securing personal information, resolving consumer complaints, or decreasing information asymmetry, the regulations are a good step toward driving customer-centric innovation in the ecosystem.”

Ahir Mitra
Ahir Mitra
RELATED ARTICLES

Most Popular

Recent Comments