India prepares list of approved digital loan apps

A man walks behind the Reserve Bank of India (RBI) logo inside its head office in Mumbai, India April 8, 2022. REUTERS/Francis Mascarenhas/File Photo

MUMBAI, Sept 9 (Reuters) – The Indian government is stepping up its scrutiny of digital lending apps to weed out those that conduct unethical lending and collection practices, the government said in a notification on Friday.

The central bank has been asked to prepare a list of legal digital lending apps while the government will help ensure that only those apps make loans, he said.

“The Minister of Finance has expressed concern about the increase in cases of illegal loan apps offering loans/microloans, especially to vulnerable and low income people at exorbitant interest rates…and clawback practices predatory practices involving blackmail,” the government said.

The government has also ordered the Reserve Bank of India to monitor accounts that may be used for money laundering and to review and, if necessary, revoke the licenses of dormant shadow banks that may be misused. wisely through loan applications.

All other government departments have also been instructed to take all possible measures to prevent the operation of such apps, while India’s enterprise ministry has been instructed to identify bogus companies and deregister them to prevent their misuse.

Stricter digital lending rules and increased scrutiny of these illegal lending apps come after growing consumer complaints about unfair practices have the central bank and government worried.

Reporting by Nupur Anand; edited by Jason Neely and David Evans

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