Loan applications that failed to link to their partner bank or non-bank finance company will be removed from App Play Store in India.
The linking allows users to check the apps’ connection with banks or NBFCs, which in turn will highlight the loan payout apps or loan brokers they approve or are connected to.
The new rule was rolled out by Google on September 5 after discussions with the Ministry of Electronics and Information Technology (MeitY) and the Reserve Bank of India (RBI), who set September 19 as the deadline for it. Apps that don’t meet the deadline will be deleted from the store economic times report said.
“For apps that continue to be non-compliant after the specified deadline, we have taken necessary enforcement actions, including removing apps from the Play Store, as part of our ongoing compliance reviews,” a Google spokesman said ET.
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“The government has been trying to combat the threat of digital lending apps cheating customers by enticing instant loans. It has also put pressure on the ecosystem that proliferates a majority of these apps to do more to weed out fake apps. Google will continue to work with law enforcement and industry groups to address this issue,” the spokesperson added.
RBI Gov. Shaktikanta Das on Tuesday warned of the rampant rise of digital lending platforms charging inflated interest rates, indulging in unethical clawbacks and violating privacy.
“The need of the hour is to ensure security assurance after a process of green light (whitelisting) and due diligence has been completed by the regulated entities. RBI, in cooperation with other relevant authorities, is taking steps to address this issue and take further steps as appropriate.
“As we continue to support technological advances and innovation, it is equally important that governance and behavioral issues are also properly addressed,” he said at a fintech event.
The IT ministry, in consultation with the RBI and the Treasury, is also working on comprehensive guidelines detailing the legal conditions that loan payout apps and loan brokerage platforms must comply with when operating in India, a senior ministry official said.
“Rather than asking them (Google or Apple) to allow or ban specific apps, our approach is to create a comprehensive framework that includes measures within which such (rental) apps can operate,” said an official at the IT Ministry publication
The IT ministry has also asked Google to “waterproof” its rules for listing credit apps, another official said.
On September 9, the Treasury said it had asked the RBI to whitelist lending apps that would be allowed to operate in India. The ministry said the IT ministry is being asked to ensure that only such apps are allowed to operate in India.
According to Google’s policy, all apps that offer loans directly, generate leads for banks and NBFCs, or connect customers with third-party lenders must provide details such as minimum and maximum repayment times, interest rates, and other costs in metadata. Lending apps are also required to send a copy of their RBI license to Google India if they have one, the report said.