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The Reserve Bank of India (RBI) is taking proactive steps to combat the rise of illegal lending apps in the country by considering setting up a Digital India Trust Agency (DIGITA). The move comes in response to the growing concerns over the proliferation of such apps that exploit vulnerable customers with high interest rates and aggressive collection practices.

Illegal lending apps have become a major issue in India, with reports of individuals falling into debt traps due to excessive interest rates and hidden charges. These apps often target individuals who are in urgent need of funds and do not have access to traditional banking services. This has led to cases of harassment and coercion by loan sharks operating through these apps.

To curb these illegal activities, the RBI is exploring the establishment of DIGITA as a specialized agency to oversee and regulate digital lending platforms. DIGITA would be responsible for monitoring and regulating the activities of these platforms to ensure compliance with consumer protection laws and fair lending practices.

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The setting up of DIGITA would signal a significant step towards safeguarding the interests of consumers in the digital lending space. It would provide a dedicated platform for individuals to report any unauthorized lending activities and seek redressal for grievances. Additionally, DIGITA would work closely with law enforcement agencies to crack down on illegal lending apps and bring the perpetrators to justice.

The RBI’s initiative to combat illegal lending apps through the establishment of DIGITA is a welcome development that will help protect consumers from predatory lending practices. By creating a dedicated agency to monitor and regulate digital lending platforms, the RBI is sending a strong message that it is committed to protecting consumers’ rights and ensuring a fair and transparent financial system.

The rise of illegal lending apps is a pressing issue that requires immediate attention and action. The RBI’s proposal to set up DIGITA is a bold step towards addressing this challenge and ensuring a safe and secure environment for digital lending in India. All stakeholders must work together to support the establishment of DIGITA and collaborate in the fight against illegal lending practices. Only through collective efforts can we create a robust regulatory framework that safeguards the interests of consumers and promotes a healthy digital lending ecosystem in the country.

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