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“The government must be proactive to eliminate unauthorized loan applications” | India News

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NEW DELHI: Fintech experts believe that the Union government must be more proactive to eradicate the threat of predatory digital loan applications. This includes taking a stronger stance against these Chinese-sourced apps.
“The Ministry of Electronics and Information Technology (MEITY) has carried out multiple rounds of app bans. However, it has never banned any China-based loan application. Sometimes they are even more dangerous for a person’s privacy than game apps. RBI has also not acted beyond giving warnings, ”said Srikanth L of Cashless Consumer, a citizen-led collective that raises awareness about digital transactions.
On the other hand, the People’s Bank of China fined a leading Chinese credit agency, Pengyuan Credit, 620,000 yuan for “engaging in personal credit operations independently and without approval,” it added.
The RBI has received 1,019 complaints regarding unregulated and unregistered online loan applications, Union Minister of State for Finance Anurag Thakur said in a written response in Lok Sabha on February 8. He also said the central bank issued a warning to clients in December to raise awareness on the issue, and has also created a working group to study “all aspects of digital lending.” “The regional directors of the RBI regional offices are also in contact with the state police,” added the response.
Unauthorized loan applications, many hosted on Chinese servers, became increasingly common during the close of 2020, when many of those who lost their livelihoods due to the pandemic were searching for cash. The apps offered users short-term credit at very high interest rates and then, in some cases, harassed or mistreated borrowers for money. Google removed at least 100 such apps in January, after Telangana police wrote to the tech giant about their misuse. By law, any organization that lends money to the public must be approved by the RBI. However, these ‘rogue’ online loan modules are not approved and therefore operate in a policy vacuum.

Times of India

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