Zerodha founder Nithin Kamath, in a series of tweets, warned people against using unregulated and illegal applications for loans. Kamath said that there has been a spike in suicides due to harassment from loan agents, and that it is important to know that there are laws that protect individuals from such loan agents.
Kamath urged people who are facing such harassment from loan agents of “shady and illegal predatory loan apps” to file a complaint with the government’s National Cyber Crime Reporting Portal (NCCRP). The NCCRP enables victims and complainants to file a complaint online. This portal deals with cyber crime with a special focus on cyber crime against women and children.
Unregulated predatory loan apps lend at exorbitant rates as high as 100-200 per cent, said Kamath. Not only that they also get access to all the contacts and photos when an individual installs the app. “If they don't repay, they start harassing all the contacts with calls and lewd pictures that are morphed,” said Kamath, adding that there are laws that protect individuals from harassment.
The Zerodha founder also said that it is “insane” to share all the information for a loan that one will most likely not be able to repay. He said that borrowing at rates of 50-100 per cent per year is absurd.
“The vast majority of these apps are illegal and unregulated. Since many users discover these apps there, the app stores should do more to filter these shady apps from being listed,” he added.
Kamath’s tweets come after a 22-year-old engineering student, Tejas Nair, died by suicide as he was unable to repay loans he took from an online Chinese mobile app providing loans in Karnataka. Nair was allegedly tortured by the app’s executives after he failed to return the loan amount.
According to Nair’s father, he had allegedly taken loans from his cousins first and had to take further loans from the app to repay them.
“Sorry, mom and dad for whatever I did but I have no other choice other than this. I am unable to pay other loans that are there in my name and this is my final decision. Good bye…" said Nair’s suicide note.
Nair, a mechanical engineering student at Nitte Meenakshi College in Yelahanka, was allegedly blackmailed by executives of the app. They threatened him and said they would release nude pictures of him to the family and had sent a few to some of the family members too, said Nair’s father.
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