The Reserve Bank of India is set to prepare a “Whitelist” of all the legal lending apps, the government said on Friday, following a meeting chaired by finance minister Nirmala Sitharaman a day before. The minister, along with top officials, chaired the meeting to discuss various issued related to illegal loan apps outside the regular banking channels, the finance ministry said on Friday, September 9.
While the RBI will prepare the white list, the Ministry of Electronics and Information Technology (MEITY) will ensure that only these “Whitelist” Apps are hosted on App Stores, like Google Play Store or Apple Store.
“The Finance Minister expressed concern on increasing instances of illegal loan apps offering loans/ micro credits, especially to vulnerable and low-income group people at exorbitantly high interest rates and processing/ hidden charges, and predatory recovery practices involving blackmailing, criminal intimidation etc,” said a press release from the government.
FM Sitharaman also noted the possibility of money laundering, tax evasions, breach or privacy of data, and misuse of unregulated payment aggregators, shell companies, defunct NBFCs etc. for perpetrating such actions.
After detailed deliberations on legal, procedural and technical aspects of the issue, it was decided in the meeting that the RBI will prepare the whitelist. The central bank will also monitor the ‘mule/ rented’ accounts that may be used for money laundering and to review or cancel dormant NBFCs to avoid their misuse.
The RBI has also been asked to ensure that registration of payment aggregators are completed within a timeframe and no unregistered payment aggregator should be allowed to function after that. The ministry of corporate affairs will identify shell companies and deregister them to prevent their misuse.
The government said that steps should be taken to increase cyber awareness for customers, bank employees, law enforcement agencies and other stakeholders.
All ministries and agencies have been asked to take all possible actions to prevent operations of such illegal loan apps.
The finance ministry will monitor the actionable points for compliance on a regular basis, it said in the statement.
Following a News18 investigative series on Chinese loan app scam, involving as many as 1,000 illegal companies operating in India and trapping many needy and innocent in the vicious debt, the government has already begun conducting massive raids and searches in Bengaluru, Hyderabad and Gurugram.
A senior government official told News18 the corporate affairs’ ministry raided the companies, which included those that helped Chinese open firms in India with fake directors.
Sources also confirmed that the home ministry will soon start a campaign to educate people about the fake Chinese loan apps, and is likely to write a letter to all states to take the required steps against them.
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