 Hello and welcome to Chharnakya IS Academy, I am Priya Kumari and today's special current affairs topic is Instant Loan Apps Case. So before proceeding, let's see today's points of discussion that is why this topic is in news, what is instant loan, then current issue going on, modus operandi, how were victims affected, target audiences and steps taken. So why this topic is in news, like you can see, Instant Loan Apps Case, man dies by suicide, sift victim in Telangana or two Chinese among four held for operating Instant Loan App, Chennai Police. So first of all, let's see what is instant loan, so instant loans are those types of loans which do not require too much of the documentation, they are approved really quick without any asset showcase. So the process is very minimal and convenient compared to the traditional bank loans. Instant loans are also termed as personal loan or quick loan, it saves the lenders as well as borrowers time. So the current issue is, this is a racket going on in which instant personal loans are offered through mobile apps at ex-orbitant interest rates by unauthorized lenders. Many people who lost their jobs during the pandemic or who require money urgently borrowed money from the apps and got caught up in a vicious cycle of debt trap. A customer can avail a loan within a few minutes after uploading personal details, a three-month bank statement, a Dhar card copy and a bank card copy on the app. Loans from as less as Rs. 1000 to Rs. 50,000 can be availed for seven days. Of the numerous apps that are available on Google Play Store, most do not have any tie-up with any bank or non-banking financial institution, so how these apps work? What is this trap going on? So when the customer downloads an app and uploads the documents demanded, the loan amount is credited into the bank account. The phone number of the customer as well as numbers of his family members are shared by the app company with others. Here, let me tell you that when you download any app, the app asks you whether you are allowing to access the contacts of photographs or media or anything. They do ask and what we do actually, we say yes, yes, you are allowed to access our contacts or any other thing without knowing that this is actually going to trap you in these things. So after a customer avails one loan, telecallers and agents of about 20-30 similar apps call the customers and lure them into availing more loans, saying they are eligible because their credentials have been verified by the company from which they borrowed the first loan. So many customers fell for this trick and ended borrowing up to 50,000. Let me tell you here that this is not even 50,000, it's more than that. It's actually up to 2 lakh, 3 lakh, this much amount people have taken. So while the interest rate is 35%, after the due date, a flat Rs. 3000 penalty per day is levied on the customer. So many customers end up borrowing more to repay a previous instant loan, hence they trap in this vicious cycle. So how were the victims affected? So after issuing the customers from their app for 7 days, this app company, what they do? They divide all the customers into different categories of buckets. On a due date, it is called as D0 bucket. After the due date from day 1 to day 3, it is S1 bucket. From day 4 to 10, it is S2 bucket and from day 11 to 30, it is S3 bucket. So the treatment of a customer depends on which bucket the customer is in. Immediately after the due date, a customer will be harassed with dozens of calls. During S2 bucket, abusive calls will be made to family members. Then later threats in blackmail starts. Then finally, this app company, they access the contacts of relatives and friends of the customers and send them WhatsApp messages defaming the defaulter. So unable to bear the humiliation while 2% have died by suicide, several people lost police complaints after which cyberabad police busted the racket. So who are the target audiences? See in this pandemic, many people lost their jobs. So the educated lot and the small-time businessman hit by the sudden lockdowns and the economic downturn and majority of victims in the loan app scam, it turns out that well-educated individuals from IT sector and professionals are involved in this. And steps taken, like recently the police in Telangana and Andhra Pradesh have identified the following mobile apps which are offering instant loans like cash mama, loan zone, dhanadhan loan, cash up, cash bus, mera loan and etc etc. The Andhra Pradesh police has issued an advisory not to avail loans from 30 mobile apps. Then recently Reserve Bank of India has cracked down on them and imposed several conditions for banks and non-banking finance companies that lend through them. Henceforth, any bank or NBFC that issues a digital lending platform has to provide the borrower or loan agreement on its later head. It must also disclose the names of the digital lending platforms it partners on its website. So that's all for today's topic. Thank you and see you in the next topic. Have a nice day. Don't forget to like, share and subscribe to our channel. And press the bell icon to never miss an update.