In an effort to curtail the use of illicit lending apps in the country, regulators in India are calling on Google to help police the situation and rein in those that engage in underhanded practices not sanctioned by the central bank.

The Reserve Bank of India (RBI) has been communicating with the Alphabet subsidiary about instituting policies that can help do away with unscrupulous lending apps, Reuters reported Monday (Sept. 19), citing four unnamed sources with insider information. 

Read more: Reserve Bank of India Strengthens Digital Lending Rules

While Google doesn’t fall under the supervision of India’s central bank, regulators have also been seeking the assistance of lenders to increase checks against illegal lending apps, according to the report. Illegal lenders typically charge excessively high rates for interest and other fees, and they often engage in recovery practices that are not permitted by RBI or break money laundering or other government laws.

Last year, Google changed its Play Store developer program policy for financial services apps. Effective September 2021, personal loan apps in India warrant additional information.  

“We have removed over 2,000 personal loan apps targeting India from the Play Store for violation of the Play policy requirements,” a Google spokesperson said, per Reuters. “We will continue to engage with law enforcement agencies and industry bodies to help address this issue.”

Related: RBI to FinTechs: Non-Banks Can’t Reload Funds to Prepaid Wallets, Cards

The RBI mandates that lending apps available in app stores must be backed by regulated entities, but it’s Google who is the enforcer and must oversee and ensure compliance. Google was also asked to look into curbing illegal lending apps on other distribution channels, an unnamed industry source who is directly involved told Reuters.

The search giant is also moving to take action on the complaints it gets about apps 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,” one of the four industry sources told Reuters.

New PYMNTS Study: How Consumers Use Digital Banks

A PYMNTS survey of 2,124 US consumers shows that while two-thirds of consumers have used FinTechs for some aspect of banking services, just 9.3% call them their primary bank.

We’re always on the lookout for opportunities to partner with innovators and disruptors.

Learn More

Source link

Previous articleHeadache Types and Natural Remedies
Next articleWhy Some Women Don’t Tell Their Partners About Miscarriages