July 28, 2021 3:28:49 am
THE DELHI High Court on Tuesday said digital lending platforms cannot be allowed to charge an “exorbitant” rate of interest and observed that it expects the Centre and the Reserve Bank of India to come out with something to fix the rate of interest.
“Don’t allow all these things. You are a custodian of interest of a small man also,” the division Bench of Chief Justice D N Patel and Justice Jyoti Singh while listing a PIL, seeking regulation of the online digital lenders, for hearing on August 27.
The petition filed by Dharanidhar Karimojji, a freelancer in digital marketing, through advocate Prashant Bhushan, seeks fixing of the maximum rate of interest chargeable by online digital vendors and setting up of a grievance redressal for borrowers in every state. It alleges that the online lending platforms are offering instant loans but deducting almost 35 per cent to 45 per cent of loan money as platform fees, service charges and on other pretexts.
The RBI told the court that Centre has to come out with a regulation. “We regulate banks and non-banking finance companies. These online lending platforms are different,” it told the court.
The court said interest rate cannot be exorbitant. The Bench also told the Centre that it should “be quick in reacting in this matter”. “RBI cannot say ‘I don’t have powers’. The rate of interest you should finalise,” it said.
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