The government and the Reserve Bank of India (RBI) has asked Alphabet Inc's Google to bring more stringent checks to help curb the use of illegal loan lending applications in India.
Google has also been asked to look at curtailing the rise of such apps via other distribution channels such as websites and other means of downloads, the report cited a person close to the development as saying.
Meanwhile, Google is set to roll out a new advertising policy soon for financial services in India which would require advertisers to be verified to show financial services ads in India.
As part of the verification, advertisers must demonstrate that they are licensed with the relevant financial services regulator.
Even though Google doesn't fall under the Reserve Bank of India's (RBI) ambit, the US tech giant has been called several times in the last few months to meetings by the central bank and the Indian government and urged to introduce tougher checks and balances that can help in weeding out such apps, according to news report by Reuters.
Google said last year it revised its Play Store developer program policy for financial services apps, including requiring additional requirements for personal loan apps in India effective September 2021.
"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, adding that such steps are taken if its policies are violated. "We will continue to engage with law enforcement agencies and industry bodies to help address this issue," the spokesperson added.
While RBI requires that any lending apps listed on app stores be backed by regulated entities, it is up to Google to enforce this and monitor compliance.
The government and the RBI are in the process of preparing a white list of approved lending applications. The central bank has also laid down norms to ensure that a borrower must deal directly with a bank for lending and recovery which can help to keep the third-party recovery agents away.
Google dominates India's app market with 95% of smartphones using its Android platform.
RBI To Make 'Whitelist' Of Legal Platforms
Meanwhile, in view of rising digital frauds in the country, Finance Minister Nirmala Sitharaman has discussed various issues related to illegal loan apps in a meeting and decided to take a host of measures to check the operations of such apps.
Most of the digital lending apps are not registered with the central bank and operate by themselves.
RBI will soon prepare a ‘whitelist’ of all legal applications (apps) that offer loans, and the Ministry of Electronics and Information Technology (MeitY) will ensure that only these apps are hosted on app stores.
RBI will also ensure that the registration of payment aggregators is completed within a timeframe and no unregistered payment aggregator be allowed to function after that, the finance ministry said in a statement on Friday.
All ministries or agencies have been asked to take all possible actions to prevent the operations of such apps.
