Govt Asks Google To Introduce Stringent Checks To Help Curb Illegal Lending Apps In India
Google has been called several times in the past few months to meetings by the RBI and the government and urged to introduce tough checks and balances that can help in weeding out illegal lending apps
The government and the Reserve Bank of India (RBI) have asked Google to introduce more strict checks to help curb the use of illegal digital lending applications in India, quoting sources news agency Reuters reported on Monday.
According to the report, even though Google doesn't fall under the RBI ambit, the US tech giant has been called several times in the past few months to meetings by the central bank and the government and urged to introduce stringent checks and balances that can help in weeding out such apps.
The regulators have already asked lenders to step up checks against illegal lending apps, which became popular during the pandemic. Indian regulators seek to control the proliferation of such apps that engage in unscrupulous activities such as charging excessive interest rates and fees or in recovery practices which are not authorised by the RBI or violate money laundering and other government guidelines.
Last year, Google said that it revised its Play Store developer program policy for financial services apps, including requiring additional requirements for personal loan apps in India effective September 2021.
A Google spokesperson said, “We have removed over 2,000 personal loan apps targeting India from the Play Store for violation of the Play policy requirements,” while adding that such steps are taken if its policies are violated.
"We will continue to engage with law enforcement agencies and industry bodies to help address this issue," the spokesperson said.
While the RBI requires that any lending apps listed on app stores be backed by regulated entities, it is up to Google to enforce this and monitor compliance.
Google has also been asked to look at curtailing the rise of such apps via other distribution channels such as websites and other means of downloads, according to another industry source who is directly involved.
Google is also starting to act on complaints received from industry bodies. "Earlier Google would not respond to complaints on individual apps. Now they are more proactive and do look into it when a complaint is flagged to them," said a source privy to the development.
The government and the RBI are in the process of preparing a white list of approved lending applications. The central bank 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 the third-party recovery agents away.
Google dominates India's app market with 95 per cent of smartphones using its Android platform.
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