#ParliamentUpdate: Lok Sabha Question on Fraud through Online Loan Apps

#InLokSabha on 24.7.2023

MP Rajendra Gavit asked the Ministry of Finance if they’ve tracked frauds on online loans apps (& details), if there are any rules for regulating them, apps against whom action is taken for non-compliance & steps to monitor potential defaulters.


Dr. Bhagwat Karad, MOS Finance stated that complaints for such apps were registered with RBI as per the RBI-Integrated Ombudsman Scheme, 2021. Further, a portal named ‘Sachet’ was established by the State Level Coordination Committee for registering complaints by the public.


As per inputs from RBI & National Crime Records Bureau , no info was available on the number of frauds being committed through online loan apps. However, as per NCRB , the number of cyber fraud cases are 14,007 in 2021 (including frauds committed through online apps).

He mentioned the total number of complaints related to ‘digital lending apps’ received by the RBI Ombudsman from November 12, 2021 to March 31, 2023 was 1325. No data was available prior to November 12, 2021.

While the Minister has claimed that there is no data available on the rise of online lending app frauds, reports dated February 14, 2023 have shown a rise in such frauds, especially on economically weaker groups.

The Minister also said that RBI has issued regulatory guidelines on digital lending on September 2, 2022 aimed at firming up the regulatory framework for digital lending while enhancing customer protection and making the digital lending ecosystem safe and sound.

RBI has not imposed monetary penalty on any entity for non-compliance of Digital Lending guidelines. Further, compliance is examined on sample basis during supervisory assessment & non-compliance is taken up for rectification + enforcement action.

In spite of the RBI-Integrated Ombudsman Scheme, 2021 and ‘Sachet’ portal, entities apart from the RBI have been prosecuting such cases under different laws like the Prevention of Anti-Social Activities Act, leading to double jeopardy.