The Digital Lenders’ Association of India (DLAI), which represents over 90 digital lending apps, on Tuesday said it has not received any communication from the ministry of electronics and information technology (MeitY) with regard to restriction on any digital lending app or warning on any fraudulent practices.
The statement from the association comes after the government on February 5 banned around 232 apps involved in betting, gambling, money laundering and unauthorised lending with alleged links to China. The banned apps also included 94 lending apps even with non-Chinese links. Some of the apps blocked as per MeitY’s order include Kissht, PayU-owned LazyPay, Ola Avail Finance, Indiabulls Home Loans, payrupik, Quick Finance, among others.
“Our 90+ members follow a mandatory code of conduct and follow the guidelines specified by various regulatory authorities. We are in the process of collating information from our members and other industry associates about the details. We will approach MeitY and other relevant authorities to understand the matter in detail and implement requisite action points if required,” DLAI said.
Meanwhile, digital lending app Kissht said on Tuesday, “The app is currently operating smoothly for our customers across India. While we haven’t received any formal notification on the status of our app, we are aware of the development and are seeking clarity from the concerned authorities”.
Customers of these digital lending apps like Lazypay also took to Twitter to complain about the not being able to access the app and clear the dues.
KreditBee, another personal loan app, whose proxy app link name also features in the list of blocked apps, said, “Aptoid is a third-party App Store, with which we have no formal or informal partnership. We are speculating that it’s a proxy app on Aptoide, and investigating this further. Blocking of the Aptoid link is a favourable outcome for us”.
Under Section 69A of the Information Technology Act, the government has the powers to restrict access to any content to protect the sovereignty and integrity of the country, security of the state, friendly relations with foreign states or for public order.
The Reserve Bank of India has also asked MeitY to allow only regulated digital lending apps on the app stores. “The Reserve Bank of India (RBI) has furnished the list of Digital Lending Apps (DLAs) being used by Regulated Entities (REs) of RBI to the Ministry of Electronics & Information Technology (MeitY), which in turn, has shared the list with respective intermediary (App Stores) and requested them to ensure that only the apps figuring in the list are hosted on their app stores,” Minister of State for Finance Bhagwat Kisanrao Karad said in a written reply to a question in Rajya Sabha on Tuesday.
With regard to quick loan apps also, there have been multiple complaints of hefty interest rates and threats from the owners of these apps on delay in payment of loans. Further, the Enforcement Directorate has seized Rs 859.15 crore under Prevention of Money Laundering Act. As part of the investigation, the proceeds for the crime have been generated and acquired by accused persons/entities through illegal loan apps, the minister said.
In the last two years, the government has banned about 400 apps related to gaming, video editing, video conferencing, music and entertainment, among others. Lately, the government has also been very vocal about prohibiting games which have wagering as an outcome. In a bid to put a blanket ban on betting in online gaming, MeitY on January 2 notified draft amendments to the IT rules that once enacted will enable self regulatory framework and additional due diligence by online gaming companies.