Paisalo Gets Notice From Delhi High Court Over Alleged Exorbitant Interest Rates
The central accusation is that Paisalo Digital is allegedly charging an exorbitant interest rate of 125% per annum on loans.
The Delhi High Court on Monday issued notice to the Reserve Bank of India, the Securities and Exchange Board of India, and Paisalo Digital Ltd.
The prime accusation is that Paisalo Digital is allegedly charging an exorbitant interest rates to the tune of 125% per annum on loans. The petitioner has sought an independent inquiry into what he claims are unfair lending practices by the company.
The petitioner claims that he/she had taken a loan of approximately Rs 12 crore from Paisalo, and it was brought to the court's attention that there were three independent sanction letters dated March 21, 2018, in this regard.
The petitioner pointed to a Possession Notice received in May 2019, indicating an outstanding amount of Rs 15.9 crore. However, within a month, the outstanding amount escalated to over Rs 23 crore, as per a notice issued in June 2019.
The petitioner highlighted a District Magistrate's order in September 2021, which dismissed proceedings initiated by Paisalo under the SARFAESI Act for recovery of the disputed amount.
After the dismissal of the SARFAESI proceedings, Paisalo issued an arbitration notice to the petitioner in December 2023, claiming an outstanding amount of over Rs 76.7 crore, including late fees and charges.
Paisalo argued that the petitioner had submitted a complaint with the RBI, which had been closed. It contended that a contract was entered into between the petitioner and Paisalo, and the terms of the contract, including the interest rate and penalty, were clear. It added that the case was contractual in nature.
Meanwhile, the Indian market regulator, SEBI, submitted that it did not regulate the lending practices of non-banking financial companies.
