RBI to prepare 'whitelist' of apps to crack down on illegal loan menace
On August 25, Google said it had removed over 2,000 loan apps from the India Play Store since January this year for violating terms, misrepresenting information, and questionable offline behaviour.
In a bid to put an end to the proliferation of illegal loan applications on smartphone app stores, the Reserve Bank of India will prepare a "whitelist" of instant finance apps that will be allowed to be hosted on these online storefronts.
The RBI will prepare the list and the Ministry of Electronics and Information Technology (MeitY) will ensure only those apps are hosted on the app stores, a government official told CNBC-TV18.
The RBI decided to embark on this exercise after Finance Minister Nirmala Sitharaman recently expressed concerns on the increasing instances of Illegal loan apps offering loans/micro credit — especially to vulnerable and low-income group people — at extortionate interest rates and processing/hidden charges, and predatory recovery practices involving blackmailing, criminal intimidation, etc.
Sitharaman had also noted the possibility of money laundering, tax evasion, breach/privacy of data, and misuse of unregulated payment aggregators, shell companies, defunct NBFCs etc. for perpetrating such actions.
To prepare this whitelist, the Reserve Bank monitor "mule/rented" accounts that may be used for money laundering, review/cancel the licences of dormant non-banking financial companies (NBFCs) to avoid their misuse, ensure registration of payment aggregators within a set timeframe, and block unregistered aggregators after that. To aid in the RBI's efforts, the Ministry of Corporate Affairs will identify shell companies and deregister them, government sources said.
On August 25, Google said it had removed over 2,000 loan apps from the India Play Store since January this year for violating terms, misrepresenting information, and questionable offline behaviour.
First Published: Sept 9, 2022 3:23 PM IST
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