Delhi HC seeks RBI’s stand on PIL plea over data protection

ECONOMY – BANKING

The Delhi High Court asked the response of Reserve Bank of India (RBI) to reply to a petition alleging violation of a borrower’s right to privacy and data protection by Non-Banking Financial Companies (NBFCs) through digital lending applications.
The PIL plea by Himakshi Bhargav alleged that in spite of the issuance of Reserve Bank of India Digital Lending Guidelines of 2025, certain digital lending applications continued to access prohibited mobile phone resources, and deployed coercive consent mechanisms.
“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 plea argued.
A Bench of Chief Justice D.K. Upadhyaya and Justice Tejas Karia issued notice to the Centre and RBI, observing that the PIL plea by Himakshi Bhargav “raised a serious concern”. “We are concerned with what action you are taking,” the court said.
“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 authorities concerned in case of violation of these directions,” the court ordered.