India plans to make authorized lending apps mandatory on the country’s app stores, the latest in a series of recent moves by the world’s second-largest internet market to crack down on sketchy and anti-establishment lenders. ethics.
The Reserve Bank of India, the country’s central bank, will prepare a “whitelist” of all legal apps and the country’s IT ministry will ensure that only whitelisted apps are hosted on app stores. , the finance ministry said in a statement.
The central bank will also monitor “mule” or “leased” accounts for money laundering practices and review and revoke the licenses of non-bank financial institutions if found guilty, the finance ministry said on Friday.
Payment aggregators in the country will be required to register within a specific time frame, and India’s Ministry of Corporate Affairs will work to identify shell companies and deregister them to prevent abuse.
Indian authorities have cracked down on loan apps that charge exorbitant fees and use unethical means to collect payments. India’s central bank said earlier this month it was moving forward with new guidelines for digital lending that will require companies to provide more disclosure and transparency to benefit consumers and restrict several business practices. .
Google said last month it had blocked more than 2,000 unethical loan apps in India this year.
Dozens of loan apps have mushroomed in India in recent quarters, with many offering loans to customers with zero credit scores and low savings and then using unethical means to get their money back. .
“The Minister of Finance expressed concern about the increase in cases of illegal loan apps offering loans/microloans especially to vulnerable and low income people at exorbitant interest rates and processing fees/ hidden, and predatory scavenging practices involving blackmail, criminal intimidation, etc.,” the ministry said.
“Smt. Sitharaman also noted the possibility of money laundering, tax evasion, data breach/privacy and misuse of unregulated payment aggregators, front companies, former NBFCs, etc. to perpetrate such actions.
This is a developing story. Check back for more details.