Loan apps will soon be controlled by the Indian government. This decision was announced after the officials of the Ministry of Finance met on September 8.
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In recent months, Indian authorities have been trying to prevent loans and other credit applications from introducing unethical payment collection methods and exorbitant fees.
The Reserve Bank of India, the country’s central bank, also said it would launch new guidelines for digital lending.
This new policy is expected to force loan apps to provide greater transparency and disclosure, which will certainly benefit consumers.
Loan apps are controlled by India!
According to the latest report from TechCrunch, India’s central bank will establish a new whitelist for all legal credit applications.
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A person scans and downloads an app to begin the process of converting their physical driver’s license into an official digital version to be stored on a cell phone on August 4, 2021, at a Harmons Grocery store in Salt Lake City, Utah. Utah is the first state in the nation to begin converting and offering digital driver’s licenses on mobile devices.
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On the other hand, the country’s IT ministry said they would ensure that the whitelisted applications are the only digital lending services that will be hosted in all app stores, such as Google Play Store and Apple App Store.
“The Treasury Secretary expressed his concern about the increasing number of illegal loan apps offering loans/micro-credits,” the Treasury Department said in its official document.
Meanwhile, the central bank said it would check “mule” accounts if found guilty of money laundering. Non-banking financial institutions involved will also be assessed.
If they are proven to participate in money laundering activities, their license can be revoked.
The rise of credit apps in India
In recent years, the popularity of credit applications in India has grown rapidly. This is because many of them allow customers to borrow money without needing a credit score.
However, everything has a price. Usually, these loan apps will use unethical means to collect borrowed money from their consumers.
That’s why Indian law enforcement agencies made hundreds of arrests after people complained that these lending apps were harassing and misusing them to collect money.
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Keep your tabs open here on TechTimes for more news updates on lending and other applications.
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Written by Griffin Davis
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