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Sharing whitelist of legitimate digital lending apps could adversely affect financial, economic system of the country: RBI

Our contention: Won’t a publicly available whitelist help consumers to cross-check the list for allowed digital lending apps, rather than falling prey to the numerous predatory lending apps that exist on the app stores, and have been found to target vulnerable Indian borrowers?

In February this year, the Ministry of Finance told the parliament that a whitelist of permitted digital lending apps has been given by the RBI to the IT Ministry, which in turn has sent this list to app stores. With regard to this, we filed an RTI request with the RBI, asking it for a copy of the whitelist.

The central bank refused to share the whitelist of permitted digital lending apps (DLA) sent to the Google Play Store and Apple App Store stating that the information sought is a confidential correspondence and public disclosure of the same may prejudicially affect the economic interests of the State.

We filed an appeal with the First Appellate Authority at RBI contending that it is not evident as to how the requested information will affect the economic interests of the State and the larger public interest warrants the disclosure of this information because a publicly available whitelist will help consumers to cross-check the list for allowed digital lending apps, rather than falling prey to the numerous predatory lending apps that exist on the app stores; such apps have been found to target vulnerable Indian borrowers, charging them exorbitant interest rates, and resorting to extortion and blackmail tactics to collect repayments.

The First Appellate Authority denied our appeal noting that the sharing of the whitelist could have a “catastrophic” effect on the financial ecosystem and could adversely affect the entire economic system of the country.

Here is the full response of the First Appellate Authority:

“The correspondence made by RBI to the Ministry of Electronics and Information Technology is confidential correspondence between a regulator of financial system and the Central Government for taking some desired action. The information given by one regulator to another/to a government entity, in strict confidence, solely for the purpose of taking some desired action, cannot be divulged to the public as it may have large implications on the functioning of financial system and it might create ripple effect on the whole financial system of the country in general. The survival of the banking system depends on some confidence in the system and if anything, that undermines such a confidence is allowed to move into the public domain, the result will be catastrophic. By such an action, the entire economic system of the country is likely to be adversely affected. Therefore, such information sought for by the applicant is exempt from disclosure under section 8(1)(a) of the RTI Act. Further, the contention regarding disclosure of such information, which has been collected from the regulated entities in fiduciary capacity, in ‘larger public interest’ as per section 8(1)(e) of the RTI Act is not acceptable in view of the above position, as ‘larger public interest’ lies in not disclosing the information. Thus, I find no infirmity in the reply furnished by the CPIO. The appeal is therefore dismissed.”

We still don’t understand what are the implications for the economic and financial system from sharing the whitelist of digital lending apps. We still believe that a publicly available whitelist will help consumers cross-check the list for allowed digital lending apps, rather than fall prey to the numerous predatory lending apps that exist on the app stores.


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