This is with reference to the current news which I have come across in one of the leading & renowned newspaper Indian Express about an instant loan to the needy in the current pandemic time which has actually affected the majority of the people financially (either the private organisation employee or entrepreneur). We have also come across the news related to suicide due to the financial crisis. In a tough situation like this when it has become tough for people to even fulfill their day-to-day needs, the ray of hope was the instant money application on mobile phones which can be easily downloaded from google play ( for android users). There are multiple apps like Cash Baba, Rupee Time, RsRush Pro, Rupee Bar, AAA Cash, My Cash, Loan Baba Flexicash, Kush Cash to name a few. One may find multiple such apps on google play which claim that they abide by the policies of an NBFC & can solve your money issue instantly. People are relying on this because the policies of a bank to provide unsecured loans also have become very stringent & need multiple documents. In some cases the employee is not getting even the salary slip – in such cases bank statements will also not work as it is showing less salary due to salary cuts which show the monthly obligation of a person is exceeding then income. Hence, a person is unable to fit in the requirement in the procedure of availing unsecured loans from the banks.

This is the tough time that will also pass, have patience. The word of caution from me before taking loans from such mentioned apps is – BEWARE. The loan procedure is simple but a big-time threat to the privacy of an individual. One needs to simply download the app from google play store & register with the mobile number, fill the basic information with the employment details & bank details to get the loan. The loan amount may start from Rs. 1000/- to Rs. 10000/- & sometimes it goes up to Rs. 15000/- (a handful of apps). The point which we should pay attention to is the charges they deduct for providing the loan in the name of processing fees, interest, GST, etc, and the loan tenure. These charges vary from 10% (rare cases) up to 33- 35% which is way high. The situation becomes horrible when we get to know that the loan period is only 7 days to 15 days means the charges vary from 40% to 120- 140% per month. As the procedure is simple and people get the loan amount in their respective bank account in few minutes with no documents required (except PAN Card & Adhaar Card) but it is a big-time threat to borrowers’ privacy as they take the permission to read the messages, check the location & read the phone book of the borrower during the registration process which data they use if in case the borrower fails to repay the amount due to some reasons. Before the due date the borrower starts getting calls about the repayment along with the messages & later after the due date a sort of threatening call. As they have access to the phone book of the borrower, may randomly call anyone from the borrowers’ phone book data – a new way of harassing a person mentally.

I will end this post here & will continue explaining about another type of apps which are a fraud as it takes money as membership fees before providing the loan & then will never come back, with the steps that can be taken by google play store & RBI to keep a check on such activities & to avoid suicide cases.
Ref: 31 Dec 2020 Indian Express News Page 1 & 2

Author:
Vikas Sharma, Assistant Professor, Unitedworld School of Business (UWSB)