The Narendra Modi government and the Reserve Bank of India have asked search engine giant Google to bring in more stringent checks to help in curbing the use of illegal digital lending applications in India.
A Reuters report said that the US tech giant has been called several times in the last few months by the RBI and the Centre and asked to introduce tough checks and balances to help in weeding out such apps.
The regulators in India have asked the lenders to escalate checks against illegal lending apps which gained prominence during the Covid-19 pandemic. The regulators have sought to control the proliferation of such apps engaging in unscrupulous activities like charging excessive interest rates and fees or in recovery practices not authorised by the RBI or violate money laundering or other government norms, Reuters reported.
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The search engine giant said it had revised its Play Store programme policy for the financial services apps which included seeking additional requirements for personal loan apps in India with effect from September 2021.
A Google spokesperson told Reuters the company had removed over 2,000 personal loan apps targeting India from the Play Store after they were found violating the Play policy requirements.
Google assured it will continue to engage with law enforcement agencies and industry bodies to help in addressing the issue. The RBI requires that any lending app listed on app stores should be backed by regulated entities. The search engine giant has been asked to curtail such apps through other distribution channels like websites and other means of downloads, the Reuters report added.
A representative from the industry told Reuters that earlier Google would not respond to complaints on individual apps, but now is more proactive and looks into the matter when flagged.
The Centre and the RBI are said to be preparing a white list of approved lending apps. The RBI has also laid down norms to ensure that a borrower must deal directly with a bank for lending and recovery which can help to keep third-party recovery agents away.
{{/usCountry}}The Centre and the RBI are said to be preparing a white list of approved lending apps. The RBI has also laid down norms to ensure that a borrower must deal directly with a bank for lending and recovery which can help to keep third-party recovery agents away.
{{/usCountry}}Google is currently dominating India's app market with 95 per cent of the smartphones using the Android platform. The ministry of electronic and information technology and the RBI didn't respond to Reuters' email request for a comment.
According to report, the country's digital lending market has facilitated $2.2 billion in digital loans in 2021-22, although its not clear much is it through apps engaging in illegal practices. These lenders often reach customers via advertisements on platforms like Facebook and Google.