Digital Lending Companies Meet MeitY Over Apps Ban

Several digital lending apps that have been impacted by the Ministry of Electronics and Information Technology (MeitY)’s sudden ban, have met with ministry officials on Wednesday (February 8) to discuss the issue.

According to a Mint report, around 15 major digital lending companies met MeitY officials in Delhi yesterday. The companies were given 30-minute slots to make individual representations and there were group representations as well. The publication added that digital lending companies at the meeting were strictly prohibited from sharing details outside of the meeting room.

A fintech founder cited by Mint noted that Google has received a list from MeitY and has yet to act on it. Earlier in the week, media reports noted that the tech giant is in touch with the ministry and seeking clarifications on the matter before blocking the apps. 

Google has also reportedly sent out notifications to the apps in the list regarding their possible blocking soon.

Another founder cited in the report noted that the officials were relieved by the fact that almost everyone is either a regulated entity or is working with one. The person noted that MeitY officials said they would give some respite soon.

Reportedly, the government has sought details such as the company’s investors, customer type, grievance redressal mechanism and data storage details.

Earlier, Inc42 reported that the government has banned the apps for three key reasons, including potential links to China via investors, complaints of harassment and strong-arm recovery tactics and storage of data outside of India.

On Tuesday (February 7), the Finance Ministry told Rajya Sabha that the Reserve Bank of India has prepared a whitelist of digital lending apps and MeitY would ensure that only those apps were available on app stores operating in India. 

MeitY’ has started banning 94 digital lending apps, along with 138 online betting apps in a crackdown on both fronts.

While there is no clarity on which apps are getting banned, RBI Governor Shaktikanta Das told the media on Wednesday (February 8), “We have given a list of apps which work with NBFCs (non-banking finance companies) to the government. On that basis, the government has taken this step.”

RBI has asked NBFCs to share a list of digital lending apps they work with, Das said, adding that there are many illegal and illegitimate apps which offer lending services.

Earlier this week, multiple media outlets, including Inc42, reported a list of apps from a MeitY document and mentioned the likes of KreditBee, LazyPay, Kissht, PayMe, TrueBalance and others as being on the ban list.

However, almost all of the aforementioned digital lending apps said the links mentioned in the list led to mirror websites and clone apps and were not related to them.

Note: We at Inc42 take our ethics very seriously. More information about it can be found here.