RBI Received 1,500 Digital Lending App Complaints, Over 100,000 Digital Transaction Complaints
The Reserve Bank of India (RBI) has received 1,509 complaints related to mobile digital lending apps, including around 1,019 against unregulated and unregistered digital lending apps, the Minister of State for Finance told Parliament, Anurag Thakur. In terms of digital transactions, the central bank received 137,823 complaints in 2019-2020, up 113% from 64,607 complaints the previous year.
Several MPs raised the issue of predatory digital lending apps in Lok Sabha and asked the government for responses on the corrective actions it has taken or proposed to take to protect the public. In its response, Thakur said that while the RBI issued a circular in June last year to non-bank lenders and banks to step up their transparency and disclosure efforts on digital lending apps and platforms, it also had issued a warning to clients in December and set up a task force to study all aspects of digital lending business.
About 490 complaints have been filed against registered lenders disbursing loans through digital lending apps, Thakur said according to Lok Sabha’s Question No.948, Feb. 8, 2021. Proactive intervention by law enforcement agencies the State in accordance with applicable laws. The regional directors of the RBI regional offices are also in contact with the state police, ”he added.
Thankur also said that in the case of regulated non-bank financial companies, complaints are sent to the RBI’s Mediation Program for NBFCs and other departments.
“In cases where the application is managed by a non-RBI company, these complaints are handled with the relevant Companies Registrar (RoC) in the state level coordinating committee. In cases where no information is available concerning the lending institution, the complainant is then invited to send a copy of his loan agreement with the credit institution and after examination, the case is shared with the wing of economic crimes, of the respective state governments in the state level coordination committee, ”Thakur said.
Complaints related to digital transactions up 113%
According to the RBI Mediation Programs Annual Report for 2019-2020, complaints related to digital transactions increased 113% to 137,823 for 2019-2020, from 64,607 complaints the previous year. Complaints about digital transactions now represent 44.66% of all complaints received by the RBI ombudsperson, up from 33% the year before, he said.
The RBI currently operates three separate ombudsman programs, respectively for banks, non-banks and digital transactions. He plans to merge the three programs into a single holistic “One Nation, One Mediator” platform.
Instrument level complaints
- ATMs and debit cards: 67,800 complaints in 2019-2020 compared to 36,359 in 2018-2019
- Mobile and electronic banking:41,300 complaints in 2019-2020 compared to 14,794 in 2018-2019
- Credit card: 28,713 complaints in 2019-20 against 13,274 in 2018-19
- Digital payment transactions: 2,481 complaints in 2019-20 against 470 in 2018-19
- Prepaid instruments: 2,061 complaints, or 83% of all complaints lodged with the Ombudsman for digital transactions
Of the 67,800 complaints received by the RBI ombudsperson regarding debit cards in 2019-2020, around 31,832 complaints concerned a debited account but cash not distributed through ATMs (up 64% from 2018- 19) and approximately 15,752 complaints were throughput related. into account without using the card or card details (up 251% 2018-19). Only 7,511 complaints lodged with the RBI ombudsman concerned stolen or cloned cards, up 51% from the previous year.
Types of payment complaints
- Money transfers via Unified Payments Interface, Bharat Bill Payments or Bharat QR Code: 1,089 complaints or 43.89%
- Mobile / electronic funds transfers: 598 complaints or 24.10%
- Non-return of funds due to incorrect beneficiary transfer by the system participant: 218 complaints or 8.79%
- Non-compliance with RBI guidelines at the PPI: 198 complaints or 7.98%
- Violation of the RBI Guidelines in terms of fees / charges: 58 complaints or 2.34%
- Off topic: 75 complaints or 3.02%
- Others: 245 complaints or 9.88%
About 56.12% of all digital payments complaints were resolved through mutual agreements, while 43.88% of complaints were dismissed on the grounds that the complaint was ‘not based on a complaint’ . This calls for greater awareness among complainants of the digital transaction mediation program, the RBI said.
Complaints at the establishment level
It is important to note that this is not an exhaustive list of the entities against which complaints were filed between 2019-2020, but a list of the entities that received the most complaints.
- PhonePe: 1,095 complaints, the majority of which concerned money transfer issues, mobile / electronic transfers and non-compliance with PPI guidelines
- AmazonPay: 305 complaints, the majority of which were related to issues with money transfer, mobile / electronic transfers, non-return and non-compliance with PPI guidelines
- MobiKwik: 239 complaints, related to issues of money transfer, mobile / electronic transfers, non-return and non-compliance with PPI guidelines
- PayU: 152 complaints, issues related to transfers, mobile / electronic transfers and non-compliance with PPI guidelines
Bharat bill payments
- National Payments Corporation of India (BBPS Central Unit): 13 complaints related to money transfer issues
- IndiaIdeas (BillDesk): 23 complaints related to money transfer issues
- Avenues India: 19 complaints related to money transfer issues
- E-Governance of CSC: 19n complaints related to money transfer issues, mobile / electronic transfers and non-compliance with PPI guidelines
- Paytm payment bank: 2,272, of which 951 related to mobile / electronic transfer issues and 212 to ATMs / debit cards
- Airtel Payment Bank: 1,420 complaints, of which 497 related to mobile / electronic transfer issues and 68 to ATMs / debit cards
- Fino payment bank: 205 complaints, including 44 related to mobile / electronic transfer issues and 33 to ATMs / debit cards
- HDFC Bank: 27,169 complaints, including 2,879 related to debit / debit cards, 6,002 to credit cards and 3,509 related to mobile / electronic transfer problems
- ICICI Bank: 21,372 complaints, including 2,530 related to debit / banknote cards, 3,356 to credit cards and 3,027 related to mobile / electronic transfer issues
- Axis Bank: 17,124 complaints, including 2,378 related to ATM / debit cards, 2,892 to credit cards and 2,349 related to mobile / electronic transfer issues
- All private banks: 98,645 complaints, of which 12,328 concerned ATMs / debit cards, 17,768 credit cards and 12,429 concerned mobile / electronic transfer issues
Public sector banks
- National Bank of India: 82,984 complaints, including 24,844 related to debit / ATM cards, 1,145 to credit cards and 12,306 related to mobile / electronic transfer problems
- National Bank of Punjab: 16,457 complaints, including 4,913 related to ATM / debit cards, 198 to credit cards and 2,616 related to mobile / electronic transfer issues
- Bank of Baroda: 13,883 complaints, including 3,714 related to debit / dAB cards, 329 to credit cards and 1,955 related to mobile / electronic transfer issues
- All public sector banks: 1,75,506 complaints, of which 52,254 related to bank / debit cards, 2,341 to credit cards and 25,237 related to mobile / electronic transfer problems