Bangladesh Bank warns against unauthorised digital lending schemes

The Bangladesh Financial Intelligence Unit (BFIU) has warned the public against unauthorised lending schemes operating through mobile apps, online platforms and social media, often offering quick loans on easy terms.

The warning was issued on Thursday (August 27) as the financial intelligence agency raised concerns over growing risks of fraud, misuse of personal data, unauthorised financial transactions and excessive collection of money linked to such platforms.

The BFIU said lending is a regulated financial activity in Bangladesh. No individual, organisation, mobile app, online platform or other digital service can legally provide loans without approval from Bangladesh Bank and compliance with relevant laws, regulations and regulatory requirements.

It also clarified that no authorisation has been granted to unauthorised digital platforms to provide loans through mobile apps or online services.

According to the agency, some unauthorised loan apps collect users’ personal information, contact lists, photographs and other sensitive data from their mobile devices. Such information may later be used to pressure borrowers, threaten them with disclosure of private data or subject them to harassment in the name of loan recovery.

The BFIU said these activities can also create risks of fraud, financial crime and money laundering. Under the Money Laundering Prevention Act 2012, fraudulent lending schemes used to misappropriate money may constitute a predicate offence associated with money laundering and may be punishable under the law.

The agency advised people not to take loans from unfamiliar mobile apps, websites or online platforms. Users have also been urged not to share personal details, identity-document information, bank account details or sensitive data stored on their phones with unknown lending services.

The BFIU further advised people to be particularly cautious if a lender demands advance payments, registration fees, processing charges or other payments before approving a loan.

The agency said it has so far identified information on 31 unauthorised mobile loan apps, including Sathi Loan, PopCash, FinCash, Quick Loan, Quick Taka, Dhaka Fin, LoanVibe, Dost Loan, Taka Cash Loan, SSH Money, LoanBuddy, CashHora, Alo Cash, Fast Loan, Easy Taka, Dhoirjyo Loan, Fin.Do, BongoCash, Asha Loan, Subidha Loan, Smart Loan BD, Online Loan BD, City Online Loan, BD Sohoj Loan, Cash Loan, Sonali, LoanHat and TakaNao.

The BFIU urged anyone who has been defrauded after taking a loan from an unauthorised platform, or has information about apps, online platforms, social media groups, individuals or organisations involved in such activities, to report it to the authorities.

It also called on the public to remain vigilant and share relevant information to help curb unauthorised digital lending activities.