The government has informed Parliament that the Ministry of Electronics and Information Technology (MeitY) has blocked 87 illegal loan lending applications under Section 69A of the Information Technology Act, 2000.
This information came in a written reply to an unstarred question in the Lok Sabha on December 1, directed to the Minister of Corporate Affairs. The question asked whether the government plans to define “shell companies” under the Companies Act, 2013, and what steps are being taken to improve monitoring and prevent illegal activities by non-functional firms.
The Ministry of Corporate Affairs said that “regulatory action… is taken from time to time” against companies involved in online lending through loan apps. It added that whenever violations are found, “appropriate legal action is taken.” The ministry also clarified that while actions are being taken against non-compliant firms, the term “Shell Companies” has not been defined in the Companies Act, 2013, and there is no proposal to introduce such a definition.
The answer also highlighted the broader enforcement mechanism, stating that the government orders “Inquiries, Inspections, Investigations respectively on the basis of complaints, references and information regarding non-compliances.” Suitable action, including striking off companies, is taken based on these findings. It thereafter mentioned in the same reply that MeitY has blocked 87 illegal loan apps under Section 69A, which empowers this ministry to block public access to online content.
{{/usCountry}}The answer also highlighted the broader enforcement mechanism, stating that the government orders “Inquiries, Inspections, Investigations respectively on the basis of complaints, references and information regarding non-compliances.” Suitable action, including striking off companies, is taken based on these findings. It thereafter mentioned in the same reply that MeitY has blocked 87 illegal loan apps under Section 69A, which empowers this ministry to block public access to online content.
{{/usCountry}}The reply noted that inspections and compliance checks are ongoing and monitored regularly.