India to control which lending apps are permitted to app stores in latest crackdown

guest · Sep 9, 2022

By Manish Singh @refsrc, Jagmeet Singh @jagmeets13 - September 9, 2022

India plans to mandate which loan apps are allowed on app stores in the country, the latest in a series of recent steps from the world’s second largest internet market to crackdown on sketchy and unethical lenders.

The Reserve Bank of India, the country’s central bank, will prepare a “whitelist” of all legal apps and the nation’s IT ministry will ensure that only whitelisted apps are hosted on app stores, the Finance Ministry said in a statement.
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The central bank will also monitor “mule” or “rented” accounts for money laundering practices and review and cancel licenses of non banking financial institutions if they are found guilty, the Finance Ministry said Friday.

Payment aggregators in the country will be required to register themselves in within specific timeframe, and India’s Ministry of Corporate Affairs will work to identify shell companies and revoke their registrations to prevent misuse.
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Scores of lending apps have mushroomed in India in recent quarters, many offering loans to customers without any credit score and with poor savings and later used unethical means to collect their money back. Law enforcement agencies in the country have made hundreds of arrests on complaints alleging abuse and harassment from agents collecting repayments on behalf of loan apps.
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Google said last month that it had blocked over 2,000 unethical lending apps in India this year.

“The Finance Minister expressed concern on increasing instances of illegal loan apps offering loans/micro credits, especially to vulnerable & low-income group people at exorbitantly high interest rates and processing/hidden charges, and predatory recovery practices involving blackmailing, criminal intimidation etc,” the ministry said today.
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India to control which lending apps are permitted to app stores in latest crackdown

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