New Delhi: The Delhi High Court Tuesday said online lending platforms offering short-term personal loans through mobile apps cannot be allowed to charge exorbitant interest and processing fees and asked the Centre and RBI to look into the issue.
An expert body is required to look into the issue, the high court said, added that it expects that the Centre and RBI will come out with some solution by the next date of hearing, August 27.
“Rate of interest should not be exorbitant. Just look at the difficulties. An expert body is required. If you people are so slow in taking action, we will do it with our order with the help of an expert committee,” a bench of Chief Justice D N Patel and Justice Jyoti Singh said.
The bench further said, “This much of exorbitant rate of interest and processing fees cannot be allowed.” The court was hearing a PIL seeking regulation of online lending platforms offering short-term personal loans at exorbitant interest rates through mobile apps, and allegedly humiliating and harassing people in case of delay in repayment.
During the hearing, Additional Solicitor General Chetan Sharma and central government standing counsel Anurag Ahluwalia said the government will look into the issue and sought some time for it.
Advocate Ramesh Babu MR, representing RBI, said the Reserve Bank of India regulates banks and non-banking finance companies and it does not regulate online lending platforms and that the central government has the power to do so.
He further said a committee has already been constituted which has to give its report and sought time to place on record the report and an additional affidavit.
The petition has been filed by Telangana-based Dharanidhar Karimojji, who works as a freelancer in digital marketing, claiming there are more than 300 mobile applications that provide instant loans ranging from Rs 1,500 to Rs 30,000 for 7 to 15 days.
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