Delhi High Court to Examine Privacy Violations in Digital Lending

The Delhi High Court has issued notice on a PIL addressing alleged privacy breaches by digital lending applications. The plea highlights non-compliance with RBI guidelines and seeks enforcement to protect borrowers' data rights, especially for vulnerable groups. Major app platforms face scrutiny for unauthorized access and data collection practices.

In a significant move, the Delhi High Court has taken notice of a Public Interest Litigation (PIL) demanding action against Regulated Entities including Non-Banking Financial Companies (NBFCs) and Lending Service Providers (LSPs) involved in digital lending. The petition accuses these entities of violating the Reserve Bank of India's Digital Lending Guidelines, a charge that is being taken up by a Division Bench led by Chief Justice D.K. Upadhyaya and Justice Tejas Karia. Key respondents include the Union Government, the RBI, Google, and Apple India.

The PIL centers on serious allegations of rights violations, focusing on intrusive data collection practices by NBFC-backed Digital Lending Applications (DLAs) in India. Himakshi Bharghav, the petitioner, argues that despite stringent guidelines issued by the RBI, these platforms persist in exploiting user data such as contact lists and call logs, along with enforcing broad consent methods. The plea represents public interest, emphasizing the protection of privacy for digital borrowers, particularly vulnerable groups including students and first-time borrowers.

Additionally, the petition outlines violations found in several lending apps, such as Slice and ZestMoney, which allegedly exploit user data beyond permissible limits. The lack of enforcement by the RBI is criticized, alleging a breach of duties under constitutional provisions like Article 21. The plea urges the Delhi High Court to take decisive action under Article 226 to address these ongoing privacy issues, leveraging significant legal precedents to advocate for the protection of borrowers' data rights.

(With inputs from agencies.)