Senior Congress leader KC Venugopal has urged the Centre to introduce stringent legislation to tackle the growing threat posed by illegal digital lending apps, citing increasing incidents of financial fraud, data breaches and cyber harassment.
In a letter to Union Finance Minister Nirmala Sitharaman, the AICC general secretary called for offences such as extortion, data theft and online abuse linked to these apps to be classified as serious non-bailable crimes, according to a statement issued on Sunday.
Venugopal also proposed setting up a Joint Task Force comprising the Finance, IT and Home Ministries to dismantle networks of illegal operators and freeze their bank accounts.
He stressed the need to ensure that digital lending platforms do not charge interest rates beyond limits set by the Reserve Bank of India, and recommended clear caps on processing fees and borrowing costs.
The Congress leader further demanded a strict ban on such apps accessing users’ personal data, including contacts and photo galleries, and called for stronger legal safeguards against coercive recovery practices, threats and abusive messaging.
Highlighting the importance of quick grievance redressal, he suggested creating a dedicated helpline or portal for complaints. He also proposed making it mandatory for loan applications to include a nominee or emergency contact to improve transparency.
Venugopal urged the government to direct tech companies to list only RBI-approved lending apps on platforms like the Google Play Store and Apple App Store, and recommended launching an official platform for the public to verify authorised lenders.
He also called for tighter regulation of misleading advertisements on social media and a ban on celebrity endorsements of such apps.
Stating that he would raise the issue both inside and outside Parliament, Venugopal emphasised the urgency of action, pointing to cases of severe harassment linked to loan apps, including reports of suicides and individuals going into hiding in Kerala and other states.
He cited the case of BDS student Nithin Raj from Anjarakkandi Dental College in Kannur, whose death was reportedly linked to threats from a loan app, along with allegations of caste-based harassment on campus.
(With inputs from PTI)