Delhi HC Asks Centre, RBI to Respond to Plea Against NBFC Digital Lending Apps' Data Misuse
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The Delhi High Court has ordered the Centre and the Reserve Bank of India (RBI) to respond to a petition that seeks to suspend the licenses of several non-banking financial company (NBFC) digital lending apps. The petition, filed by 22-year-old Himakshi Bhargava, alleges that these apps, including Slice, Branch, Home Credit, and Simpl, access borrowers' data without consent, violating RBI's Digital Lending Guidelines, 2025. According to the guidelines, digital lending apps are not allowed to access mobile phone resources such as files, media, contacts, and call logs without the borrower's explicit consent. However, the petition claims that several apps have included clauses in their privacy policies that allow access to borrowers' contact lists for transaction facilitation. The court has expressed concern over the issue, stating that the unchecked access to borrowers' data has allowed digital lending platforms to transform smartphones into real-time surveillance devices. The court has directed the RBI to specify the steps taken to enforce its guidelines and the action taken against entities that have violated them. The RBI has been asked to file a counter-affidavit detailing the action taken against entities that have violated the guidelines. The matter will be heard again on April 1. The petition has raised serious concerns about the misuse of borrowers' data by digital lending apps and the need for stricter regulations to protect consumers.
