Libertatem Magazine

Delhi High Court Seeks Response From Centre, RBI in PIL to Regulate Online Lending Platforms

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A notice had been issued by the Delhi HC in a PIL that sought regulation of online lending platforms (Dharanidhar Karimojji vs UOI).

Brief Facts:

The petitioner stated that online lending platforms exploited borrowers by charging interest as high as 365% per annum. They emphasized that a search on Google Play store App Store displays over 200 apps. The petitioner pointed out how they operate and were willing to put cash into the bank account of borrowers.

The Petitioner had tested around 25 Chinese loan and Fake apps.  This was done to know how it worked. Fake loan apps like Wowcash, Antcash, Sealoan, etc. asked for advance payment 199/- to 799/- but never give loans.  Many overlooked the interest rates, penalties, and the track record of these lenders in the hurry to get easy loans. Many started with borrowing small amounts from Rs. 500 to Rs. 50,000. Their dependency rose and ended up taking multiple loans. The petition stated that this was done until their cash flows dried up and they started defaulting. The petitioner was represented by Advocate Prashant Bhushan.


The petitioner was aggrieved that there was no uniform law to regulate online digital lending platforms. There was no cap on the maximum interest rate or other charges being levied by the online lenders too. The digital lending companies were exploiting borrowers by charging very high interest on loans i.e. even 365 percent per annum. The petitioner submitted that they were harassing the borrowers in case of default.

They argued that the State money lending laws, as well as RBI circulars, were not being implemented properly. Some of the online loan App lenders were functioning under Non-Banking Financial Companies regulated by RBI. RBI was not controlling the exorbitant interest rate and other charges being imposed by these companies. They were not being restrained from harassing the borrowers. 

The petitioner sought guidelines to regulate online lending platforms. They also prayed that a grievance redressal mechanism for borrowers is set up in every State. This was to resolve the problems they face from online digital lending App operators or their agents.

Court’s Decision:

A Division Bench of Chief Justice DN Patel and Justice Jyoti Singh had been set up. The next hearing would be on February 19. is now on Telegram. Follow us for regular legal updates and judgment from courts. Follow us on Google News, InstagramLinkedInFacebook & Twitter. You can subscribe to our Weekly Email Updates. You can also contribute stories like this and help us spread awareness for a better society. Submit Your Post Now.

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