Are Digital Lending Apps Stealing Our Data?

There was a time when securing a personal loan was a long process that started with sending an application with a pile of documents and then waiting for a long time for the approval. However, with digital lending apps, things have changed a lot. Now, the digital lending apps provide personal loans in just a few taps.

You just need to share your phone number, and after eKYC, you will get the money instantly in your bank account, of course, subject to approval. All these steps will get processed within just 20 minutes. Sounds incredible, but true. This is the new era of digital lending.

However, with so much ease, a common question that arises is, are these digital lending apps stealing our data? Well, we get the answer in this blog. 

Access, Storage, and Sharing of Borrowers’ Data:

The digital lending apps have to follow certain guidelines shared by the apex financial body, i.e., RBI in India, in regard to the access, storage, and sharing of borrowers’ data. The digital loan apps have to take consent from the users or borrowers to access their data. As per the RBI guidelines, these apps can access the camera, microphone, location and any other facility of the borrower for only one time for the KYC procedure.

A borrower also has the flexibility to deny or accept the requested permission for the usage of the data and to share it with a third party. There will also be an option to delete the data while uninstalling the loan app. 

According to the regulator, apps or service providers cannot store biometric data in their systems unless approved by regulatory standards. RBI states that "The purpose of obtaining borrowers' consent needs to be disclosed at each stage of interface with the borrowers." 

The new restrictions aim to prevent the misuse of the borrower's personal data, such as images and contacts.

Privacy Policy and Cybersecurity Policy:

As per the RBI guidelines, the digital lending apps must share their privacy policy publicly if they want to collect personal information of the borrowers. Banks and NBFCs should also ensure that the lending service providers comply with all the required technology standards of cybersecurity suggested or mandated by the RBI. 

What to check while taking a personal loan from digital lending apps?

eKYC:

The app should process eKYC for identity verification, and you have to submit only Aadhaar and PAN.

Financing Costs:

There can be differences in the financing costs charged by fintech apps vis-à-vis banks. Check if there is a significant difference between the costs.

Data with Lender:

The app will ask for permission to access some data points. If you are too reluctant to share your data, then you can go for the traditional route.

Authenticity:

You must also check the authenticity of the digital lending apps. Generally, behind an app, there is a lending institution. Thus, the lending institution of a reliable institution should be registered with the RBI.

Reviews:

Last but not least, you can check the reviews of the app on social media.

At Rupee112, we provide the fastest loan while following all the privacy guidelines and cybersecurity measures shared by the RBI.