Online lending platforms can’t be allowed to charge exorbitant interest, says HC

The Delhi High Court said online lending platforms offering short-term personal loans through mobile apps cannot be allowed to charge exorbitant interest and processing fees. The HC also asked RBI and Center to look into the issue. Added that it expects that the Union government and RBI will come out with some solution by the next date of hearing on August 27.

Public Interest Litigation (PIL) filed by Telangana-based Dharanidhar Karimoji claims that there are more than 300 mobile applications that provide instant loans ranging from Rs. 1,500 to Rs. 30,000 for 7 to 15 days. However, these money lending applications deduct almost 35 percent to 45 percent of the loan as platform fees, service charges, and processing fees and only transfer the remaining money to the borrower’s bank accounts, the petition has said.

Source: Financial Express