Loan applications that failed to link to their partner bank or non-banking finance company will be removed from the app Play Store in India.
The linking allows users to verify apps' connection with banks or NBFCs, which in turn will highlight the loan disbursal apps or credit facilitators they have approved or tied up with.
The new rule was brought in by Google on September 5 after discussions with the Ministry of Electronics and Information Technology (MeitY) and the Reserve Bank of India (RBI) which set September 19 as the deadline for this. Apps that have failed to comply with the deadline will be deleted from the store, an Economic Times report said.
“For apps that remain non-compliant with the requirements past the deadline provided, as is done for any policy non-compliance, we have been taking necessary enforcement action as part of our ongoing policy compliance sweeps, including removal of apps from the Play Store,” a Google spokesperson told ET.
"The government has been trying to tackle the menace of digital lending apps that defraud customers through the lure of instant credit. It has also been putting pressure on the ecosystem, which distribute a majority of these apps, to do more to weed out fake apps. Google will continue to engage with law enforcement agencies and industry bodies to address this issue," the spokesperson added.
RBI Governor Shaktikanta Das on Tuesday cautioned against the unbridled mushrooming of digital lending platforms which have been charging excessive interest rates and indulging in unethical recovery and breaching data privacy.
“The need of the hour is to ensure assurance of safety after following a process of green-lighting (whitelisting) and due diligence by the regulated entities. The RBI, in association with other relevant agencies, is taking steps to address this issue and take further steps as may be necessary.
“As we continue to support technological advancement and innovation, it is equally important that adequate attention is also placed on governance and conduct issues,” he said at a Fintech event.
The IT ministry, in consultation with the RBI and the finance ministry, is also working on exhaustive guidelines that will detail the legal conditions that loan disbursal apps and loan facilitator platforms must adhere to while operating in India, a senior ministry official said.
“Instead of us asking them (Google or Apple) to allow or disallow certain apps, our approach is to draw up a comprehensive framework which will have measures within which such (loan) apps can operate,” an official from the IT ministry told the publication
The IT ministry has also asked Google to make its rules for listing loan apps “watertight,” another official said.
On September 9, the finance ministry said it had asked the RBI to prepare a whitelist of loan apps that would be allowed to operate in India. The ministry said that the IT ministry would be 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 mention details such as the minimum and maximum time for repayment, interest rates and other costs in the metadata. Loan apps are also required to submit a copy of their RBI licence to Google India if they have one, the report said.
Deccan Herald is on WhatsApp Channels| Join now for Breaking News & Editor's Picks