Deputy Governor Rajeshwar Rao on Wednesday said the Reserve Bank of India (RBI) has not sought a ban on any specific loan app from app stores, but has shared with the government a list of apps that are being used by entities. goes.
Mint reported on Wednesday that a report of the government banning some 138 gambling apps and 94 loan apps over concerns of “Chinese linkages” has caused panic in the industry. Some popular loan apps, such as PayU’s buy-now-pay-later (BNPL) service Lazypay, Kisht and Faircent, are seen as part of a ‘partial’ list that will be available from some fintech industries from Monday, the report said. -Operates in specific WhatsApp groups.
Junior finance minister Bhagwat Karad told the Rajya Sabha on Tuesday that the RBI has submitted a list of digital lending apps being used by regulated entities to the Ministry of Electronics and Information Technology (MeitY).
Karad said MeitY has shared the list with app stores and requested them to ensure that only apps in the list are hosted on their app stores.
This is not the first time that the government has moved to remove certain apps from the App Store in India. Over the past few years, several predatory loan apps have used the proliferation of smartphones and cheap data connections in India to offer quick loans to their advantage.
During COVID-19, many such apps were accused of charging unreasonable interest rates and using unfair collection practices when borrowers failed to make timely payments.
“These apps do not belong to entities regulated by RBI. Those who have our registration are mainly NBFCs. In turn, NBFCs use multiple apps,” RBI Governor Shaktikanta Das said on Wednesday.
He said that RBI asked NBFCs to list the apps they use as a lot of illegal apps promise loans through mobile phones, which have not been appointed by any NBFC.
“We have given the government a list of apps that are used by NBFCs in digital lending. Based on that, the government has taken this action,” Das said.
Karad told Parliament on Tuesday that the Enforcement Directorate (ED) has initiated investigations under the Prevention of Money Laundering Act (PMLA) in several cases where proceeds of crime have been generated and earned through illegal lending apps.
“In these cases, as on date, the proceeds of crime 2,116 crore (approx.) have been identified, of which the proceeds of crime amount to 859.15 crore has been attached/confiscated/confiscated under the provisions of PMLA. In addition, the amount of property Rs 289.28 crore has been seized under Section 37A of the Foreign Exchange Management Act, 1999.”
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