Modi Government initiates crackdown on illegal loan apps

Amid rising cases of suicide among borrowers by the day due to alleged harassment by some scamsters of digital loan apps, the government has asked the Reserve Bank of India (RBI) to prepare a “white list” of legal digital lending apps to be permitted in app stores.

Most of the digital lending apps are not registered with the central bank and are self-operated.

Finance Minister Nirmala Sitharaman decided to implement several measures to check such apps amid increasing cases of digital frauds.

It was decided that RBI will prepare a list of all legal loan apps. Also, the Ministry of Electronics and Information Technology (MeitY) will ensure that only these are 'hosted' on the App Store. RBI will monitor such accounts which can be used for money laundering. Also, dormant NBFCs (Non-Banking Financial Company) will be reviewed to avoid any misuse.

According to a report, more than one in two Indians who use instant loan apps are facing very high-interest charges, extortion and data misuse. While 58 per cent of people said when they or someone in their family/ household staff took a loan using instant loan apps in the past two years, they were charged annual interest of over 25 per cent.

Read More:- Central Vista Avenue inauguration: PM Modi unveils 28-feet-tall Netaji statue at India Gate