Mudra Compass

Illegal online lenders have been openly functioning for the past few years, providing quick cash to credulous borrowers regardless of their creditworthiness. Through arm-twisting recovery agents, these loan sharks conduct their business. These apps can be convenient because they allow you to apply for a loan without having to visit a physical location. However, there are some potential risks associated with using them and one of those is that they ask for too much personal data.

We will share ways to distinguish between real digital lending applications from phony ones, how to pick a digital lender, why Google Play should white list digital lending apps and more.

The online lender ought to be a governed organization. According to RBI norms, a fintech lender may collaborate with a licensed organization. Make sure to research the registered NBFC before downloading a digital lending app.

In other situations, a regulated organization may be an NBFC or a bank, but the publisher of the app (i.e., the person who provides the loan) may be a separate person. Therefore, it is crucial for you to determine who the regulated entity is and who is actually making the loan, even in those situations.

Today, with the publication of digital lending standards, the loan agreement is made directly between the final consumer and the regulated organization. Thus, the only entity that can lend under regulation is an NBFC. To see if the name (from your loan) is on the list, you should check the RBI’s NBFC lists. The agreement’s NBFC’s name and registered address must coincide with its RBI listing.

To safeguard them and make sure they are only doing business with firms that the RBI regulates, borrowers should perform these simple checks.

Many unregulated apps are now available in the Google Play store. These lending applications don’t have partnerships with regulated entities. All of those are warning signs if you come across an app that doesn’t perform proper KYC or doesn’t sign an appropriate e-sign or physical signature agreement.

Make sure the loan app does not have access to more personal information than is necessary. For instance, be careful not to grant access to your contact list if the loan app asks for one. As a result, extreme caution and self-awareness are needed.

In the world of online lending, regulator action is very necessary. There are numerous phony applications, unlicensed apps that are not issued by NBFCs, and unpartnered apps. Some of them have outrageous prices. More importantly, coercive collection techniques damaged the reputation of the entire digital lending sector.

All morally upright players were lumped together with those immoral actions. And it almost seems like the RBI’s intervention was a good thing for the banking and finance sector.

Making sure that only regulated, NBFC-registered organizations have their apps or the apps of their partners featured on the Google Play store is known as “whitelisting.”

You may not be performing all necessary due diligence and could end up in the hands of an unscrupulous digital lender if you are not an experienced consumer, are in need or under stress, and are looking for quick credit.

More than 300 million credit-deprived Indians in the subprime and non-prime groups who are not part of the traditional credit network must now have access to credit, according to fintech lenders. Many people still have trouble getting credit, despite the fact that they have successfully integrated some of these consumers into the credit ecosystem.

Lenders should concentrate their efforts on educating borrowers on responsible credit behavior and the advantages of timely repayments for their long-term creditworthiness in order to solve this problem. When creating financial products, lenders should also take into account the needs and expectations of both present and future generations.

How to Protect Yourself

Here are some tips for protecting your personal data:

Be wary of lending apps that ask for too much access to your personal data. If an app asks for access to your phone’s camera and microphone, it could be trying to collect information about you without your knowledge or consent.

Don’t share sensitive information with strangers online. Lending apps often ask users for their Social Security numbers and other sensitive information, which can make them vulnerable if they lose their device or get hacked by cybercriminals who want access to this kind of data.

Use two-factor authentication (2FA) whenever possible and don’t forget that 2FA adds another layer of security by requiring users to enter their login credentials into a second device after entering their username/password combination on the first device (such as logging into Facebook from an iPhone). This means even if someone steals one device with all those details stored on it, they won’t be able to log in without also having access to another device where 2FA was enabled before entering those same details again–which makes stealing sensitive info much harde.

In conclusion, it is important to be aware of the dangers that lending apps can pose if they ask for too much access to your personal data. This includes information like your social media accounts, email account, and even location history.

It’s also a good idea to limit the amount of information you share publicly on these platforms in order to prevent identity theft. For example: if you don’t want someone to know where you live or work then don’t post those details online.

If you’re concerned about how much access a particular app has over your data then we recommend checking out its privacy policy before signing up with them – this should give an overview of what kind of data they collect and how they use it (if at all).