The Delhi High Court on Wednesday issued notices to the Reserve Bank of India and the Union government on a public interest litigation (PIL) alleging widespread violations of privacy rights by non-banking financial companies (NBFCs) operating through digital lending applications.
A division bench comprising Chief Justice D K Upadhyaya and Justice Tejas Karia directed the RBI to file a detailed counter affidavit on the steps taken to enforce the Digital Lending Guidelines issued in 2025. The bench noted, “We are concerned with what action you are taking,” while observing that the PIL had “raised a serious concern.”
The PIL, filed by petitioner Himakshi Bhargav through advocates Kunal Madan and Manway Sarawagi, alleges that despite the RBI’s 2025 Digital Lending Guidelines, several digital lenders continue to:
- Illegally access mobile phone resources such as contact lists and call logs
- Collect excessive and disproportionate personal and device-level data
- Use coercive consent mechanisms that force borrowers to agree to non-negotiable privacy policies
“The data collection practices are disproportionate and bear no reasonable nexus to legitimate purposes such as KYC or credit assessment,” the petition stated, arguing that such actions violate Section 12 of the RBI guidelines.
The petitioner claimed that she had submitted a detailed complaint to the RBI in November 2025 identifying specific violations, but no remedial action was taken.
The High Court ordered the RBI to respond to the PIL by filing a counter affidavit that:
- Addresses the allegations raised in the petition
- Details the enforcement mechanism and action taken under the 2025 Digital Lending Guidelines
- Explains what steps are being taken in cases where digital lenders are found violating the RBI’s directions
The bench stressed the need for concrete action, not just guidelines on paper.
The PIL seeks specific directions to the RBI to take time-bound and effective action against NBFCs and digital lending apps that continue to operate in breach of the regulatory framework, despite clear privacy safeguards prescribed in the 2025 guidelines.
Advocates Yugal Jain and Teena also appeared for the petitioner.
The matter is expected to come up again after the RBI files its response.
