Exercise due diligence, avoid digital lenders that make borrowing too easy

The absence of due process-KYC, issuance of sanction letter and loan agreement-should act as red flags

Of the 1,100 digital lending apps available in India, 600 are illegal, according to a paper published recently by a working group of the Reserve Bank of India (RBI). Before the working group’s wide-ranging suggestions are adopted by the regulator, borrowers need to watch out for their interests. This they can do by exercising due diligence, instead of rushing in to borrow money from any entity that makes alluring promises.

Does the app follow a process?

The biggest indicator of the genuineness of a digital lending app is whether it follows a process. The app must fulfil KYC (know your