The Delhi High Court has taken up a public interest litigation that challenges ongoing practices by regulated entities, including Non-Banking Financial Companies (NBFCs) and Lending Service Providers operating digital lending applications that are alleged to be violating the Reserve Bank of India’s Guidelines on Digital Lending. A division bench comprising the Chief Justice and another judge issued notice to the Union Government, the Reserve Bank of India, and the major digital distribution platforms Google LLC and Apple India Private Limited, seeking their response to the petition. The plea was filed by an individual petitioner who raised concerns regarding the fundamental rights of borrowers, particularly focusing on alleged violations of privacy and data protection norms by digital lending applications linked to NBFCs. The petitioner contended that despite the issuance of binding guidelines by the Reserve Bank of India in May 2025 that govern digital lending activities, several NBFC-backed applications continue to access prohibited resources on mobile devices such as contact lists and call logs, collect excessive personal and device-level data, and employ coercive consent mechanisms that are contrary to the prescribed regulatory framework.
According to the petition, the petitioner examined a number of digital lending apps available on the major app stores and found that multiple popular platforms continue to access and process borrower data beyond what is permitted under the 2025 guidelines. The 2025 guidelines expressly prohibit digital lending applications from accessing sensitive mobile phone resources like contact lists, call logs and telephony functions, and restrict access to camera, microphone or location strictly for onboarding and Know Your Customer (KYC) purposes with explicit consent. The petitioner alleged that the impugned applications persist in accessing excessive data and imposing blanket consent requirements, raising serious concerns about borrower privacy and data protection in the digital lending context.
The petition further alleges that despite detailed complaints submitted to the Reserve Bank of India regarding these non-compliant practices, the central bank has neither taken visible enforcement action nor issued a public response to address the ongoing violations. The petitioner urged the court to direct the Reserve Bank of India to initiate coercive and regulatory action against the non-complying regulated entities, including cancelling or suspending the licences of those found to be in breach of the digital lending guidelines. In addition, the plea seeks a direction requiring the Reserve Bank of India to disclose the number of digital lending platforms that have been found non-compliant since the issuance of the 2025 guidelines, as well as action taken reports and compliance reviews conducted by the regulator.
The High Court’s issuance of notice and its call for responses from the Reserve Bank of India and other respondents highlight the judiciary’s engagement with emerging challenges in the digital lending ecosystem, particularly regarding regulatory compliance, consumer protection and enforcement of data privacy norms in fintech and NBFC-linked digital lending operations. The matter remains pending before the court, with the regulated entities and the Reserve Bank of India expected to file their replies on the allegations and reliefs sought by the petitioner.
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