New policy for digital lending apps from May 31 — here's what users should know

There has been a rise in complaints against predatory lending apps for resorting to unethical recovery practices. Cases have been registered in which borrowers faced harassment after taking instant loans through these apps.

Google has faced criticism in the past for not taking strong measures against instant loan apps. Last year, the tech giant was asked by the government and RBI to introduce more stringent checks to help curb the use of illegal digital lending applications, according to a Reuters report.

Users must complete the declaration form issued by Google and submit the necessary documentation before publishing their personal loan app. When the entity is ready to submit the app, they must ensure that app category is correctly set to “Finance” in the Google Play Console, that the developer account name matches the name of the associated registered business name provided through declaration, and that the app is in compliance with all.

Digital lending apps typically work by using technology to automate the loan application and disbursal process. Customers can apply for a loan using their smartphone and provide the necessary personal and financial information, which is then verified using various digital tools and sources.

Digital lending apps typically work by using technology to automate the loan application and disbursal process. Customers can apply for a loan using their smartphone and provide the necessary personal and financial information, which is then verified using various digital tools and sources.

Based on this information, the app's algorithms can make a loan decision and disburse the loan to the customer's bank account within a matter of minutes or hours. Repayments can also be done through the app, either through automatic debits or manual payments.