Finance Ministry cracks down on illegal loan apps; Directs RBI to prepare whitelists
Tweeted by @AIR
Finance Minister Nirmala Sitharaman has chaired a meeting to discuss the various issues related to illegal loan apps outside the regular banking channels.
During the meeting, Mrs. Sitharaman expressed concern on increasing instances of illegal loan apps offering loans, especially to vulnerable and low-income group people at exorbitantly high-interest rates and predatory recovery practices involving blackmailing, criminal intimidation.
She also noted the possibility of money laundering, tax evasions, privacy of data, and misuse of unregulated payment aggregators, shell companies for perpetrating such actions.
The Ministry said, after detailed deliberations on legal, procedural and technical aspects of the issue, it was decided Reserve Bank of India will prepare a whitelist of all the legal Apps. The Electronics and Information Technology Ministry will ensure that only these whitelist Apps are hosted on App Stores. It said, RBI will ensure that registration of payment aggregators be completed within a timeframe and no un-registered payment aggregator be allowed to function after that. All Ministries and agencies will take all possible actions to prevent operations of such Illegal Loan Apps.