Following the ban on over 250 apps of Chinese origin ranging across categories such as social network, gaming, e-commerce, news, business, photo and video editing, and more, the government of India has now come down heavily on lending or loan apps offering instant credit over the internet. The Ministry of Electronics and Information Technology (MeitY) had received a request from the Ministry of Home Affairs for blocking 27 loan lending apps and after due process, MeitY blocked those 27 apps under Section 69A of the Information Technology Act, 2000. The information was shared by MoS Finance Ministry Anurag Singh Thakur in the Lok Sabha earlier this week. However, the names of the blocked loan apps weren’t shared in his reply. The information was shared by the MoS in response to a question on whether the government, large technology companies, and regulated digital lenders are jointly looking for a crackdown on fraud Chinese lending apps operating in India.
The Reserve Bank of India in a circular dated June 24, 2020, reiterated to banks and NBFCs to disclose names of digital lending platforms engaged as agents on the website while lending platforms were required to disclose upfront the name of the lending institution on whose behalf they are lending. Further, a press release was also issued on December 23, 2020, cautioning people against unauthorised digital lending platforms with an appeal to verify the antecedents of the service provider. The central bank had also constituted a Working Group on January 13, 2021, to study all aspects of digital lending activities including lending through online platforms and mobile apps by RBI regulated and unregulated entities. The group had to also come out with recommendations pertaining to regulatory and customer protection measures.
In December 2020, Hyderabad police had arrested 11 persons from Delhi, Gurgaon while the Cyberabad police arrested six others in Hyderabad in instant mobile app loan fraud. Likewise, in January this year, Telangana police had arrested a Chinese national HE Jian alias Mark, a native of Jiangxi in China in connection with a probe into the instant online loan apps case. India’s digital lending market has seen significant growth over the years.
Moreover, from December 2020 till January 20, 2021, Google had also removed around 100 money lending apps that were “possibly not in compliance with the applicable legal and regulatory framework.” The information was shared by the Minister of State for Electronics and IT Sanjay Dhotre said in a written reply to the Lok Sabha in February. The digital lending value had jumped from $33 billion in FY15 to $150 billion in FY20 and is likely to grow to the $350-billion mark by FY23, according to Statista. Among the leading players in the market include Capital Float, Zest Money, Indifi, KredX, BharatPe, Lendingkart, Paisabazaar, and more. The digital lending value had jumped from $33 billion in FY15 to $150 billion in FY20 and is likely to grow to the $350-billion mark by FY23, according to Statista. Among the leading players in the market include Capital Float, Zest Money, Indifi, KredX, BharatPe, Lendingkart, Paisabazaar, and more.