The Narendra Modi government on Wednesday asked all the social media and other online platforms to ensure they do not host advertisements of fraudulent loan apps.
Union minister Rajeev Chandrasekhar said the IT ministry has made it clear that the online platforms cannot carry ads of fraudulent and illegal loans apps, which were found misleading and exploiting people on the internet.
"One of the areas we are now cracking down on is advertising of fraudulent loan apps that many platforms are carrying and we have, through yesterday's advisory, made it clear that no intermediary can carry advertisements of fraudulent loan apps because it will be misleading and exploits people who are using the internet," Chandrasekhar was quoted by PTI as saying.
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There have been widespread concerns over numerous loan and betting apps which boomed during the Covid-19 pandemic. Several people, who were struggling with finances, had turned to these apps for quick loans.
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However, reports emerged of some loan apps lending money to desperate borrowers at high interest rates and resorting to harassment and blackmail to recover money.
{{/usCountry}}However, reports emerged of some loan apps lending money to desperate borrowers at high interest rates and resorting to harassment and blackmail to recover money.
{{/usCountry}}On Tuesday, IT ministry issued an advisory directing the platforms to take additional measures to not permit any ads of illegal loan and bettings apps that have the potential to scam and mislead the users, “the consequences of which will be the sole responsibility of the intermediaries and platforms.”
It also sought robust grievance redressal mechanisms employed by intermediaries.
The advisory was issued two months after the ministry and the Reserve Bank of India had met to discuss requisite actions against such illegal betting and loan apps. During the huddle in October, the ministry had recommended that the RBI devises a more comprehensive ‘Know Your Customer’ or KYC process for the banks.
‘Google removed 2,500 fraudulent loan apps from Play Store’
The ministry's warning to online platforms comes at a time when the Centre told Parliament that Google suspended or removed over 2,500 fraudulent loan apps from its Play Store between April 2021 and July 2022.
In a written reply to the Lok Sabha, Union finance minister Nirmala Sitharaman had said that the government is constantly engaged with the central bank and other regulators to control the fraudulent loan apps.
According to the minister, the RBI also shared a ‘whitelist’ of legal apps with the government. The IT ministry had shared this list with the Google. The search engine giant's Play Store happens to be the primary source of distribution of digital loan apps.
(With PTI inputs)