Delhi HC Issues Notice On PIL Against Digital Lending Apps For RBI Guideline Violations

New Delhi, Jan 10 (KNN) The Delhi High Court on Wednesday issued notice in a public interest litigation (PIL) seeking coercive action against Regulated Entities (REs), Non-Banking Financial Companies (NBFCs), and Lending Service Providers (LSPs) operating digital lending applications that allegedly violate the Reserve Bank of India’s (RBI) Digital Lending Guidelines.

A division bench comprising Chief Justice DK Upadhyaya and Justice Tejas Karia directed responses from the Union Government, RBI, Google LLC, and Apple India Private Limited.

Allegations of Data Misuse and Coercive Practices

The PIL, filed by Himakshi Bhargav, contends that several NBFC-backed digital lending applications are infringing borrowers’ fundamental rights to privacy and data protection. 

The petition states that despite RBI issuing binding Digital Lending Guidelines on May 8, 2025, these applications continue to access prohibited mobile resources such as contact lists and call logs, collect excessive personal and device-level data, and deploy coercive consent mechanisms.

The RBI guidelines strictly restrict digital lending apps from accessing contacts, call logs, and telephony functions, while allowing limited one-time access to the camera, microphone, or location solely for onboarding and KYC purposes with explicit consent.

Specific Applications Under Scrutiny

Bhargav’s petition identifies multiple NBFC-backed applications, including Slice, Branch, Navi, Home Credit, Simpl, Dhani, Refyne, ZestMoney, Freo Pay, and LendingPlate, alleging that they continue to collect excessive user data and impose blanket consent requirements.

Despite complaints lodged with RBI, she claims no enforcement actions or public responses have been issued, and the apps remain available on major platforms such as Google Play and Apple Store.

Reliefs Sought

The PIL seeks suspension or cancellation of the licenses of the implicated entities. It also requests directions for RBI to disclose the number of digital lending platforms found non-compliant, the action taken reports (ATRs), and compliance reviews conducted since the issuance of the 2025 Guidelines.

(KNN Bureau)