LOAN APPS AND FINANCIAL DISTRESS: AN INQUIRY INTO INDIA'S EMERGING CREDIT CRISIS

Digital lending contributed to meeting the financial needs of people who had otherwise faced many difficulties in getting the required money in a very short period of time. All that comes with ease cannot be presumed to have a happy ending. Loan apps increased and created havoc. In the wake of many undesirable situations leading to the suicidal deaths of people who have fallen prey to unscrupulous lending through loan apps, this paper tries to bring into light the digital loan apps and their features, the factors responsible for unscrupulous digital lending, the mechanism adopted by loan apps operators to cheat and harass the borrowers, and finally studies the intervention by the regulatory bodies. The loan app operators leveraged the gaps in the regulatory system to override their business coupled with the dire need of people to raise easy finance via loan apps. This paper aims to explore the RBI (Reserve Bank of India), the regulatory body for the supervision and control of the banking system of India, guidelines on digital lending, and provide precautions to whosoever wants to avail finance through digital loans. The data is collected from the report published by the RBI and various articles from the electronic media. The study highlights that the financial user must be vigilant at every step in the loan availing process and ensure that the process happens transparently and within the regulatory ambit laid by the RBI.