RBI Plans To Setup DIGITA To Check Illegal Lending Apps

S.S. Rana & Co. Advocates


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The digital landscape has undergone a profound transformation in the recent years, with technology becoming increasingly intertwined with our daily lives.
India Technology
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The digital landscape has undergone a profound transformation in the recent years, with technology becoming increasingly intertwined with our daily lives. As more and more individuals and businesses rely on digital platforms for financial transactions, data sharing, and communication, the importance of trust and security in the digital realm has never been greater. In response to this evolving landscape, the Reserve Bank of India (RBI) has taken a proactive step by planning to establish the Digital India Trust Agency (DIGITA) to safeguard the integrity of digital transactions and foster trust among 1

The Digital India Trust Agency will operate at the intersection of technology, finance, and regulation, harnessing innovative solutions and collaborative partnerships to fortify the digital infrastructure. By fostering a culture of cybersecurity awareness and resilience, the DIGITA aims to instill confidence among consumers, businesses, and financial institutions, thereby underpinning the stability and trustworthiness of the digital economy.2

According to RBI, the role of the Digital India Trust Agency will extend beyond mere regulatory compliance. It is a proactive force for change, driving innovation, setting industry standards, and mitigating risks to ensure the seamless functioning of digital transactions. Through its multifaceted approach encompassing policy formulation, capacity building, and incident response, the DTA stands as a beacon of trust and reliability in the digital landscape.3

Significance of RBI's involvement via DIGITA:

One of the key functions of the DIGITA is to develop and implement industry-wide standards for digital security and data protection. Through collaboration with stakeholders across the financial sector, including banks, payment gateways, and fintech companies, the DIGITA will work towards establishing best practices that mitigate risks associated with digital transactions.4

Furthermore, the DIGITA will serve as a central point of contact for addressing cybersecurity incidents and coordinating response efforts. In the event of a cyber attack or data breach, the DIGITA will work swiftly to contain the threat, mitigate damages, and restore trust in the digital ecosystem.5

Key Features of DIGITA:

- Verification of digital lending apps: DIGITA would meticulously vet digital lending apps to ensure strict compliance with RBI regulations and guidelines, thereby upholding consumer protection standards and mitigating unscrupulous lending practices. This verification process also extends to scrutinizing the privacy and confidentiality measures implemented by these apps to safeguard users' sensitive information.

- Maintaining a public register of verified apps: DIGITA will establish and maintain a transparent public register of verified digital lending apps, empowering consumers with a reliable resource to distinguish legitimate platforms from fraudulent ones.

This initiative not only enhances transparency but also underscores the importance of privacy and confidentiality in digital transactions.

- Combating financial crimes: Apps lacking the verified mark from DIGITA would be designated as unauthorized for law enforcement purposes, marking a crucial checkpoint in the ongoing battle against financial fraud and illicit activities in the digital domain. Upholding privacy and confidentiality standards is integral to these efforts, ensuring that users' personal and financial data remains secure from exploitation by malicious actors.

Privacy and other risks for DIGITA:

Overreach and Privacy Intrusions: While enforcing regulations, DIGITA should be cautious not to overreach or intrude on users' privacy. Ensuring a balance between regulatory oversight and respecting individual privacy is crucial.

Data Misuse Risks: As DIGITA will handle sensitive information about digital lending apps and potentially users, there is a risk of data misuse or leaks within the agency. Robust internal security measures and strict confidentiality protocols are necessary to mitigate this risk.

Transparency vs. Confidentiality: While maintaining a public register of verified apps enhances transparency, DIGITA should be careful to protect sensitive business information of these apps to avoid any unintended competitive disadvantages or privacy breaches.

Public Trust Issues: As stated above, Google removed over 2,200 dubious apps from its Play Store in collaboration with Google between September 2022 and August 2023.6 However, the RBI's decision not to disclose details of dubious apps due to confidentiality reasons highlights the delicate balance between transparency and confidentiality.7 DIGITA should navigate this balance carefully to maintain public trust without compromising sensitive information.

Evolving Cyber Threats: As cyber threats evolve, DIGITA should continuously update its security measures and protocols to address new and emerging threats, ensuring that privacy and confidentiality standards remain robust and effective.8

In summary, while DIGITA has the potential to significantly enhance privacy and confidentiality in the digital lending ecosystem, it must carefully navigate the complexities of regulatory enforcement, data protection, and public transparency to effectively protect users and maintain trust.

Additional Suggestions for Effective Oversight:

To further enhance its effectiveness, the appointment of a grievance redressal officer within DIGITA can be highly beneficial. This officer would be responsible for swiftly resolving complaints and addressing concerns raised by users, ensuring a responsive and user-centric approach. Implementing a grievance mechanism similar to The Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021, would provide a structured

and transparent process for handling grievances.9 Furthermore, users having the right to removal of their personal information, as per the provisions in The Digital Personal Data Protection Act, 2023,10 would certainly empower individuals to have greater control over their personal data, further enhancing trust and confidence in digital financial transactions.


In conclusion, the establishment of the Digital Trust Agency by the Reserve Bank of India marks a significant milestone in the ongoing efforts to strengthen cybersecurity and promote trust in the digital economy. By leveraging technology, collaboration, and innovation, the DIGITA plays a crucial role in safeguarding digital transactions, protecting consumer interests, and fostering a secure and resilient digital ecosystem. As the digital landscape continues to evolve, the importance of trust and security in digital transactions will only grow. Through its proactive approach and concerted efforts, the DIGITA is well-positioned to address emerging challenges, mitigate risks, and uphold the integrity of the digital infrastructure. By promoting a culture of cybersecurity awareness and resilience, the DIGITA not only protects the interests of stakeholders but also contributes to the long-term sustainability and growth of the digital economy.

While the establishment of the Digital Trust Agency (DIGITA) by the Reserve Bank of India represents a commendable step towards fortifying cybersecurity and bolstering trust in the digital economy, there exists several aspects that warrant careful consideration. Chief among these concerns is the imperative to address cybersecurity vulnerabilities comprehensively. As digital transactions become increasingly prevalent, the risk of cyber threats, data breaches, and scams escalates, necessitating robust measures to safeguard sensitive information and mitigate potential damages. Additionally, priority should be given to stringent data protection protocols to safeguard consumer privacy and prevent unauthorized access to personal information. Furthermore, as the digital landscape evolves, the agency must remain vigilant against emerging forms of fraud and deception, continuously adapting its strategies to counteract evolving threats effectively. Effective regulation and oversight will be paramount to ensuring the integrity and resilience of the digital ecosystem, underscoring the critical role of the DIGITA in mitigating risks and promoting trust among stakeholders.

Kartikey Maithani, Trainee Associate at S.S Rana & Co. has assisted in the research of this article.


1 Available at: https://www.rbi.org.in/Scripts/PublicationReportDetails.aspx?UrlPage=&ID=1189

2 Available at: https://www.business-standard.com/finance/news/rbi-to-set-up-digital-india-trust-agency-to-check-illegal-lending-apps-124033100152_1.html

3 Available at: https://economictimes.indiatimes.com/news/economy/policy/rbi-mulls-to-set-up-digital-india-trust-agency-to-check-illegal-lending-apps/articleshow/108914335.cms?from=mdr

4 Available at: https://bfsi.economictimes.indiatimes.com/news/fintech/digita-verified-status-to-serve-as-quality-benchmark-build-credibility-without-direct-licensing-fintech-experts/10898929

5 Available at: https://www.hindustantimes.com/business/rbi-mulls-a-special-agency-to-combat-illegal-lending-apps-how-will-digita-work-101711878161544.html

6 Available at: https://timesofindia.indiatimes.com/gadgets-news/mos-finance-shares-number-of-fraudulent-loan-apps-removed-from-google-play-store/articleshow/107801517.cms#:~:text=Over%202%2C200%20fraudulent%20loan%20apps,by%20Regulated%20Entities%20(REs).

7 Available at: https://indianexpress.com/article/business/banking-and-finance/rbi-has-shared-list-of-442-lending-apps-with-it-ministry-9149831/

8 Available at: https://www.infosecawareness.in/concept/dangers-of-instant-personal-loan-apps-and-security-tips?lang=en

9 Available at: https://www.meity.gov.in/writereaddata/files/Information%20Technology%20%28Intermediary%20Guidelines%20and%20Digital%20Media%20Ethics%20Code%29%20Rules%2C%202021%20%28updated%2006.04.2023%29-.pdf

10 Available at: https://prsindia.org/billtrack/digital-personal-data-protection-bill-2023#:~:text=Rights%20and%20duties%20of%20data,incapacity%2C%20and%20(iv)%20grievance

For further information please contact at S.S Rana & Co. email: info@ssrana.in or call at (+91- 11 4012 3000). Our website can be accessed at www.ssrana.in

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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