Indian Apps Mistakenly Caught In Crossfire On Government’s Chinese Loan Apps Ban

Update note: June 3, 2024 | 18:00

• The story has been edited to reflect the fact that Indian apps were mistakenly caught in the crackdown by the government on Chinese loan apps. The headline and parts of the story have been edited to reflect this accurately

Homegrown digital lending apps such as Prosus-backed LazyPay and Kissht have been caught in the crossfire of the recently imposed ban on Chinese lending apps. Reportedly, more than 232 apps with Chinese links, including 138 betting apps and 94 loan apps, were banned by the Indian authorities on Sunday, but the action seemed to mistakenly target some Indian apps as well.

Websites of LazyPay and Kissht are currently not accessible in the country, despite both apps being of Indian origin. The access to these websites was reportedly blocked in the country on the orders of the Ministry of Electronics and Information Technology (MeitY). While the apps of both the platforms can be still downloaded from Android Play Store and Apple’s App Store, their websites are inaccessible. 

A senior MeitY official confirmed the move to Economic Times, saying many digital loan apps that had no Chinese links were also mistakenly part of the app ban announced by the Indian government on Sunday (February 5). 

“MeitY gets inputs from the Ministry of Home Affairs for blocking apps and sites. The MHA may have received inputs from various law enforcement agencies, including state police cyber cells, which could have got complaints against some of the apps,” an official of the ministry was quoted as saying. 

“Due to unavoidable circumstances our Website and App are currently unavailable via a few Internet Service Providers. Please be assured that we are doing everything to resolve the issue,” a PayU spokesperson said.

The move comes amidst a big uptick in reports related to digital lending platforms harassing and intimidating users. In many cases, the pressure tactics deployed by these platforms forced many die by suicide or take extreme measures. 

A good number of these reports involve Chinese-linked entities, or Chinese apps. Many instances of Chinese entities laundering the deposits of users to other countries and charging exorbitant amounts of interest from Indian consumers have also come to light. 

Last year, the matter had escalated to such an extent that Finance Minister Nirmala Sitharaman tasked RBI and MeitY to devise measures to ensure that only whitelisted loan apps are available on app marketplaces.