600% APR Personal Loans in India: How RBI-Licensed NBFCs Legally Charge What Chinese Loan Apps Used To

You can now buy a bank — well, a "bank" of sorts — the way you'd buy furniture off Amazon.

On 6 July 2026, The Ken's Mutasim Khan published a meticulous investigation into a booming corner of Indian consumer credit: RBI-licensed Non-Banking Financial Companies running personal loans at 500%–600% annualised APR, board-approved, Key-Fact-Statement-compliant, and — because the Reserve Bank of India has never set a numeric ceiling on interest — perfectly legal.

A 1995-vintage NBFC called Dev-Aashish Capital jumped from ₹1.7 lakh of revenue in FY24 to ₹81 crore in FY25 — a 4,800% leap. Solomon Capital, another RBI-registered shell, went from ₹22 lakh to ₹105 crore in the same year. Across a sample of 25 such NBFCs, the median revenue grew 358% year-on-year and 21 of them turned profitable. The business model, Khan writes, is disarmingly simple: buy an old NBFC shell (they list on classified sites from ₹1.9 crore, "fully compliant and transferable"), spin up a lookalike app with a name that half-rhymes with a trusted fintech, run a Google ad campaign, and lend at 1% per day.

This piece is our companion to that reporting. We will not repeat Khan's investigation — go read the original. What we will do is answer the question every borrower asks after reading it: "If this is legal, how do I protect myself?" We'll break down the actual math, expose why the "board-approved" defence is a smokescreen, and give you a red-flag checklist you can apply in 30 seconds before tapping "Apply".

If you're already inside one of these loans, our companion guide — Stuck in a 600% APR NBFC Loan? Your Legal Options — walks you through the exit playbook.

The Ken exposé in 200 words

Khan's core finding is that the 2020–21 wave of illegal Chinese instant-loan apps that once charged 800% annualised interest and drove borrowers to suicide has not vanished. It has re-formed inside the regulatory perimeter. The same 1%-per-day pricing, the same top-up spiral, the same aggressive Google Ads funnel — but now delivered by NBFCs on the RBI's own register.

The mechanics: an entrepreneur buys a dormant 1990s-vintage NBFC (aged shells trade at a premium because they avoid regulator scrutiny), rebrands it as a lookalike consumer app, and starts writing "short-term instant personal loans" ranging from ₹5,000 to ₹5 lakh at 1% simple interest per day. The RBI's 2024 APR-disclosure mandate forces them to print the true rate on the KFS — but disclosure is not the same as prohibition. As long as the number is on the page, the loan is compliant.

One NBFC founder, quoted in the piece as "Ampire Finance", walks Khan through a board-approved rate stack that reaches 600% APR. His justification: cost of borrowing + margin. No regulator has told him to stop.

What "board-approved 600%" actually means

Let's decompose Ampire's rate stack the way a credit committee would. The Ken reproduces the components; the interpretation below is ours.

Component	Annualised rate	What it really is
Cost of borrowing	~120%	The rate the NBFC itself pays to raise money — often not from banks but from construction firms, hotel groups, trading companies and other opaque corporate lenders.
Credit loss provisioning	~180%	Baked-in assumption that a large slice of the book will default. The rest of the book pays for them.
Operating cost + acquisition	~120%	Google Ads, SMS blasts, WhatsApp campaigns, collections infrastructure, KYC processing.
Regulatory + tech overhead	~30%	KFS generation, credit-bureau reporting, RBI compliance.
Margin	~150%	The lender's profit.
Board-approved APR	~600%	The number that goes on your KFS.

Two things jump out.

First, the "cost of borrowing" is itself a symptom. No commercial bank is lending to these NBFCs at 120% — because no legitimate wholesale market prices unsecured lending that high. The Ken traces the funding to unrelated corporate entities (a green-marketing company, a renewable-energy company, a banquet-hall operator). That funding graph is not the shape of a healthy financial supply chain; it looks a lot more like circular capital between related parties.

Second, "credit loss provisioning" at 180% is the tell. A lender that expects nearly two-thirds of its book to default is not underwriting credit — it is pricing a lottery in which the winners subsidise the losers. And the "winners" (borrowers who repay in full) are the ones charged 600% APR to fund the losers' write-offs.

If you're staring at a KFS and the APR line reads 400% or higher, this is the machine you're inside.

Why it's legal: the missing RBI interest-rate ceiling

India's Usurious Loans Act, 1918, still technically exists. But it is a colonial-era law designed for individual moneylenders, not for a national financial regulator's ecosystem. The Reserve Bank of India, which took over NBFC oversight in 1997, has consistently declined to set a numeric cap on interest rates for NBFCs.

RBI's public position — most recently reaffirmed in the 2024 KFS mandate and the Master Circular on Responsible Business Conduct — is that markets should set rates, and that transparency (via APR disclosure) plus a "fair practices" framework is enough. The circular does say that "excessive" and "usurious" interest is prohibited. But it never defines "usurious" as a number. In practice this means enforcement is entirely case-by-case, and — as we'll see below — often ends with a caution letter rather than a refund or a licence revocation.

Why did RBI make this choice? Two structural reasons:

1. Small-ticket unsecured lending is genuinely expensive. A ₹5,000 loan for 15 days cannot be underwritten profitably at the same APR as a ₹5 lakh personal loan for 3 years. A blanket cap would kill legitimate small-ticket credit access.
2. Rate caps in other markets have historically pushed lending underground. The regulator fears that a hard ceiling would recreate the informal-moneylender problem the Digital Lending Guidelines were designed to solve.

The problem is that the absence of a cap has created its own underground — one that runs on top of the RBI licensing rail. The regulator kept the door open for genuine small-ticket lenders and a very different class of lender walked through it.

The KFS trick: disclosure is not protection

In October 2024, RBI made the Key Fact Statement mandatory. Before you sign, you must see one page listing the sanctioned amount, tenure, EMI, all fees, and the annualised APR. The theory: an informed borrower will refuse a bad loan.

The reality, well documented in our own KFS explained guide, is that:

• The KFS appears after you've already given contact-list, SMS, and location permissions to the app.
• The APR figure is often buried on page 2 of a PDF, past the amount you're excited to receive.
• The "cooling-off" 3-day window exists but requires you to actively cancel and repay principal — which most borrowers don't discover until it's too late.
• Comparison shopping is theoretical: by the time you have the KFS from lender A, lender B has already texted you an approval.

In every predatory-NBFC case The Ken documents, the KFS was present and correct. Disclosure discharged the lender's regulatory duty. It did not protect the borrower.

How these NBFCs find you

The distribution funnel is remarkably consistent across the 25 NBFCs Khan sampled. It has four layers.

Layer 1 — Google Ads on high-intent queries. Type "instant loan 15 minutes" or "personal loan no CIBIL" into Google from an Indian IP and the first three sponsored results are almost always this class of lender. Google's advertiser vetting has improved for outright unregulated apps but does not distinguish between a 24% APR NBFC and a 600% APR NBFC — both are "RBI-registered".

Layer 2 — Name-lookalikes. The apps deliberately choose names that half-echo a trusted brand: "Zeptofinance" evokes Zepto, "Bharatloan" evokes BharatPe, and so on. Once you're in the funnel, brand association does the trust-building.

Layer 3 — Cross-selling between apps. Apply to one of these NBFCs and within 48 hours you'll receive SMS, WhatsApp forwards, Instagram DMs and calls from six others. The 25 apps in the Ken sample are, functionally, one funnel with 25 storefronts.

Layer 4 — The top-up. Once you've borrowed, the app pushes a "pre-approved top-up" the moment your first EMI clears. This is where the debt spiral begins, and it deserves its own section.

The top-up spiral (SR's story)

Khan documents a case study he calls "SR". SR took a small emergency loan from one of these apps. He couldn't quite repay it in full at maturity — so the app offered a top-up. The top-up amount, though, was smaller than the previous loan (because SR hadn't proven credit-worthy for the bigger amount). So he could only partly repay the first loan. The residual principal began compounding at 2% per day in penal interest. When the top-up came due, a second app offered him a fresh loan to cover it. Then a third to cover the second.

By the end of six months, SR was repaying ₹6 lakh a month across eight different loan apps — all owned or funded by overlapping NBFC shells. "A default is not a lost customer," Khan quotes an insider. "It is another loan opportunity."

This is why "1% per day" is so dangerous even for a borrower who thinks they'll repay quickly. The pricing is designed to guarantee that a fraction of borrowers roll over — and rolling over is where the real profit lives.

8-point red-flag checklist (apply this in 30 seconds)

Before you tap "Apply" on any Indian loan app, run this checklist. If you tick three or more, walk away.

1. Interest quoted "per day" instead of "per annum". Any lender that leads with "0.5%/day" or "1%/day" is hiding a 200%+ APR. Legitimate NBFCs quote annual rates.
2. The Play Store developer name doesn't match the NBFC on the KFS. Cross-check the exact legal entity against the RBI list of NBFCs.
3. The app asks for contact-list, SMS or gallery permission at install. RBI Digital Lending Guidelines 2022 explicitly prohibit this. See our DPDP Act rights guide.
4. No visible physical address or grievance officer name. RBI Master Circular requires both, prominently displayed in-app and on the website.
5. Processing fee above 5% of principal. Anything higher is fee-loading to push effective APR up without touching the headline rate.
6. "No CIBIL required" or "bad credit welcome" in the ad copy. Legitimate NBFCs pull CIBIL. Skipping it means the lender has priced in extreme defaults — i.e., you are subsidising them.
7. The KFS APR is above 60%. Above 60% is our internal high-risk threshold. Above 100% is a hard walk-away.
8. Reviews mention harassment, contact-list scraping, or WhatsApp-group shaming. Read the 1-star Play Store reviews before the 5-star ones. This is a leading indicator of what happens on default.

APR math: worked examples

Let's put concrete numbers on "1% per day".

Example 1 — ₹10,000 for 30 days

• Advertised: "just 1%/day, super simple"
• Interest at maturity: ₹10,000 × 1% × 30 = ₹3,000
• Processing fee (10%, upfront, deducted from disbursal): ₹1,000
• GST on fee (18%): ₹180
• Amount actually credited to your account: ₹8,820
• Amount you repay at day 30: ₹13,000
• True APR on ₹8,820 for 30 days = 577%

You wanted a ₹10,000 loan. You received ₹8,820. You repaid ₹13,000. The advertised "1% per day" was the small print of a 577% APR product.

Example 2 — ₹50,000 for 90 days, one rollover

• Advertised: 1%/day, 90-day tenure
• Simple interest at day 90: ₹50,000 × 1% × 90 = ₹45,000
• Processing fee (8%): ₹4,000; GST ₹720
• Amount credited: ₹45,280
• Amount due at day 90: ₹95,000

Borrower can only pay ₹40,000 at day 90. Residual ₹55,000 rolls into a new loan at 1%/day, plus 2%/day penal interest on the missed amount for the interim.

• 15-day penal on ₹55,000 at 2%/day = ₹16,500
• New 90-day loan on ₹71,500 at 1%/day = ₹64,350 interest
• Amount due at day 180 (from original loan): ~₹1,35,850

Original credit: ₹45,280. Repaid in the end: ~₹1,75,850. Effective all-in APR: ~773% over six months.

This is the machine SR was inside. It is also the machine you may already be inside without realising it.

How the mainstream NBFCs compare

To put the 600% number in context, here is where the visible-brand NBFCs actually price. All numbers are typical KFS-derived True APR ranges from our own app reviews database.

Lender	Typical True APR range	Product type
HDFC Bank Personal Loan	11%–18%	Bank personal loan
Bajaj Finserv	13%–24%	NBFC personal loan
Fibe (formerly EarlySalary)	24%–36%	Salary-linked short-term
KreditBee	22%–38%	Personal loan
Navi	20%–36%	App-first personal loan
MoneyView	24%–39%	App-first personal loan
CASHe	27%–45%	Short-term
Predatory NBFC shells (Ken sample)	400%–700%	1%/day short-term

The gap between the top of the mainstream range (~45%) and the bottom of the predatory range (400%) is where the entire consumer-protection question lives. See our detailed Fibe review, the KreditBee vs Navi vs CASHe comparison, and the KreditBee-Navi-CASHe True APR breakdown for how to read a KFS from any of these.

How SahiSujhav's True APR calculator catches these

We built a free tool that ingests a KFS PDF and recomputes the all-in APR. Try it: sahisujhav.in/true-apr.

The calculator:

• Reads the sanctioned principal, tenure, EMI schedule and all fees line-by-line.
• Reconstructs the borrower's actual cash flow — amount received (net of fees) vs. amount repaid.
• Computes the internal-rate-of-return APR that reconciles those cash flows.
• Flags loans above 60% APR as high-risk and pre-fills an RBI Sachet complaint template.

For the loans Khan documents, the calculator will typically return APRs between 500% and 700%. That number, printed next to a lender's own KFS, is the single most useful evidence you can hand a regulator.

What the RBI's regulatory response has (and hasn't) done

Since 2022 the RBI has:

• Issued the Digital Lending Guidelines banning contact scraping, mandating LSP disclosure, and creating the 3-day cooling-off window.
• Mandated the KFS in October 2024.
• Reinforced the Fair Practices Code via the 2025 Master Circular on Responsible Business Conduct.
• Set up the Consumer Education and Protection Cell (CEPC) as the first-level grievance body.

What it has not done:

• Set a numeric APR ceiling.
• Cancelled NBFC licences for interest rates alone (as opposed to for related failures like recovery-agent misconduct).
• Made the Sachet-portal complaint outcome public in individual cases.
• Required refund of interest above a stated threshold.

In the Everlight Holding case Khan reproduces (CEPC letter dated 24 June 2026), the RBI found the lender had violated the Master Circular. Its remedy was to "caution the lender to strictly adhere" and close the complaint. No refund. No penalty. No listing on a public register of violators.

This is not a story of regulatory ignorance. It is a story of a regulator that has explicitly chosen disclosure over prohibition, and lenders that have priced that choice into their business model.

What you should do (short version)

1. Before borrowing: run the 8-point red-flag checklist above. If in doubt, run the KFS through our True APR calculator.
2. Within 3 days of borrowing: if the APR is above 60% and you didn't realise, invoke the RBI 3-day cooling-off and return the loan.
3. After 3 days: file a complaint on RBI Sachet citing the Master Circular on Responsible Business Conduct and Fair Practices Code paragraphs 6.2 and 7.2.
4. If you're already in the top-up spiral: stop taking new top-ups today. Read our companion exit guide.
5. If you're being harassed: the Loan-App Harassment guide walks you through evidence collection and FIR filing.

The bigger picture

The Ken's investigation matters because it names a system that has been hiding in plain sight. Every element of it — the NBFC licence, the KFS, the 1%/day pricing, the top-up spiral — is individually legal. Together they form a machine that is transferring wealth from India's most credit-constrained borrowers to a small, opaque group of NBFC operators, at a scale (₹100+ crore of revenue per shell, per year) that makes it structurally unlikely to self-correct.

The regulator's tools exist. Whether they are used aggressively enough to close the gap between "board-approved" and "reasonable" is the open question of Indian consumer credit in 2026.

Until that question is answered, the burden falls on the borrower. The best defence is a KFS you actually read, an APR you actually compute, and — if you're already inside the machine — a paper trail you can hand to the CEPC.

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Reference and further reading

• Mutasim Khan, "At RBI-licensed NBFCs, 600% annual interest is board-approved, 'reasonable', and perfectly legal", The Ken, 6 July 2026.
• RBI Master Circular on Responsible Business Conduct, 2025.
• RBI Digital Lending Guidelines, 2022.
• SahiSujhav — True APR calculator, KFS explained, Hidden charges in loan apps, RBI Sachet step-by-step, Companion exit guide.