The Delhi High Court on Wednesday flagged concerns over data privacy practices in the digital lending space and sought responses from the Reserve Bank of India and the Centre on a public interest litigation alleging violations by Non-Banking Financial Companies (NBFCs) operating digital lending applications.
A bench of Chief Justice D. K. Upadhyaya and Justice Tejas Karia issued notice in the matter, observing that the PIL filed by Himakshi Bhargav “raised a serious concern”.]
Addressing the regulators, the court said, “We are concerned with what action you are taking.” The bench further directed the RBI to place on record the steps taken to enforce its Digital Lending Guidelines of 2025.
“We require the RBI to file a counter affidavit in respect of the averments in the petition and also action taken for the enforcement of the 2025 (digital lending) guidelines. The counter affidavit filed by RBI shall discuss action taken by concerned authorities in case of violation of these directions,” the court ordered.
Filed through advocates Kunal Madan and Manway Sarawagi, the petition alleges that despite the RBI issuing guidelines in 2025, several digital lending apps continue to access restricted mobile phone resources, including contact lists and call logs.
The plea also claims that these platforms collect excessive personal and device-level data and rely on coercive consent mechanisms. According to the petitioner, borrowers are forced to agree to sweeping privacy policies without any scope for negotiation.
“Borrowers are compelled to accept broad and non-negotiable privacy policies as a condition for availing services, rendering consent involuntary and contrary to Sections 12 of the Guidelines. The data collection practices are disproportionate and bear no reasonable nexus to legitimate purposes such as KYC or credit assessment,” the petition stated.
The petitioner further told the court that she had submitted a detailed complaint to the RBI in November 2025, flagging specific violations by digital lending platforms, but no action followed.
The PIL seeks directions to the RBI to take time-bound action against entities operating in breach of the guidelines. The petitioner is also represented by advocates Yugal Jain and Teena.
