RBI Fights Back Against Loan App: The Reserve Bank of India, which is in many ways the country’s banker, is considering creating a platform to check illegal online loans. To reduce fraudulent activities taking place online, the Central Bank is said to be considering the creation of a Digital India Trust Agency.
DIGITA: RBI Fights Back Against Loan app
In 2020-2021, when the COVID-19 pandemic was in full swing, online lending apps gave way to unemployment and shortages that soon followed. RBI Bank
What is RBI’s DIGITA?
Apps that do not have the ‘Verified’ mark from DIGITA will be considered unauthorized for law enforcement purposes, which will act as an important checkpoint in combating financial crimes in the digital domain.
Once established, DIGITA will be tasked with vetting digital lending apps to ensure compliance.
The proposed agency will aim to verify digital lending apps and maintain a public register of verified apps.
A thorough verification process is expected to boost transparency and accountability in the digital lending sector, which has seen a rise in fraudulent activities and unethical practices.
RBI Fights Back Against Loan app
There has been a significant increase in the applications for illegal loans in the country. This has also led to an increase in cyber frauds, resulting in many people falling victim to such scams and losing their hard-earned money. To deal with this situation, the Reserve Bank of India (RBI) has increased investigation and has geared up to curb the increasing cases of cyber fraud. It is considering setting up Digital India Trust Agency i.e. Digital India Trust Agency in India.
Digital India Trust Agency will be responsible for preventing illegal lending apps from emerging. The proposed agency will enable verification of these digital loan apps and maintain a public register of these verified applications. Any app that does not have Digital India Trust Agency “Verified” tag will be considered unauthorized. This will create an important and much-needed checkpoint in the fight against online financial fraud.
Online Loan App Cyber Fraud
The proposed agency would impose verification requirements for digital lending platforms. This will allow the creation and maintenance of a public register of verified Online Loan App.
This has been done to bring more transparency and accountability in the growing digital lending sector.
The RBI has shared a list of around 442 unique digital loan applications with the Information Technology (IT) Ministry to consider the same with Google. Meanwhile, the US tech giant removed around 2,200 digital lending apps (DLAs) from the App Store from September 2022 to August 2023.
DIGITA’s potential mission
According to reports emerging on this matter, apps lacking Digital India Trust Agency verified signature should be considered unauthorized for law enforcement purposes. Given the online paradigm, additional reach and accessibility of the Internet, there has been an unfortunate increase in fraud cases.
DIGITA: A shield against online predators
Digital India Trust Agency will act as a central verification body for digital lending platforms. Here’s how it will work:
Verification and Testing: Online Loan App must go through a rigorous verification process by Digital India Trust Agency. This will ensure that they comply with regulations and fair lending practices.
Public Register of Verified Apps: Only verified apps will be listed on a publicly accessible register maintained by Digital India Trust Agency. This empowers borrowers to make informed decisions by easily identifying legitimate lenders.
Unauthorized Apps Blocked: Any Online Loan App that does not have DIGITA’s “Verified” tag will be considered unauthorized. This acts as an alarm bell for borrowers and empowers the authorities to take action against such illegal Loan App.
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Frequently Questions Answer: RBI Fights Back Against Loan App
What is DIGITA?
DIGITA stands for Digital India Trust Agency. It’s a proposed agency by the RBI (Reserve Bank of India) to tackle the rising problem of illegal loan apps and online loan scams.
What is DIGITA’s purpose?
DIGITA will act as a central verification body for digital lending platforms. Its main goals are:
To verify and ensure compliance with regulations and fair lending practices by online loan apps.
To maintain a public register of verified apps, empowering borrowers to make informed decisions.
To identify and block unauthorized loan apps, protecting borrowers from scams.
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