Google Took Action Against 3,500 Lending Apps In India In 2022

Tech giant Google took action against 3,500 digital lending apps listed on its India app marketplace last year for flouting Play Store guidelines.

As per the company, the action was initiated after reviewing the erring apps, and, in some cases, apps were also taken down from the app marketplace. 

“In India, in 2022, we have reviewed and taken necessary enforcement action, including removal of apps, on more than 3,500 personal loan apps for violations of the Play policy requirements. We continue to uplevel our efforts in this area by regularly updating our policies and review processes,” Google was quoted as saying by news agency PTI. 

Overall, Google said that it prevented listing of 14.3 Lakh policy-violating apps and banned 1.73 Lakh ‘bad accounts.’ Besides, the US-based tech major also claimed to have prevented more than $2 Bn worth of fraudulent and abusive transactions in 2022.

This comes weeks after Google revamped its Play Store policies and issued a slew of norms prohibiting lending apps from accessing users’ contacts, photos, call logs, videos, location and other personal data post May 31, 2023.

Under the new norms, digital lending platforms have to now comply with more stringent guidelines for approval to list on Play Store. It also brought cryptocurrencies under the definition of financial products. The new app store rules also mandate the furnishing of RBI licence by those platforms that provide personal loans online. 

Digital Loans Sharks Under Spotlight

Google’s crackdown comes amid growing pressure from the union government and RBI to curb the usage of illegal lending platforms on Play Store. The concerns have been mainly guided by growing reports around multiple incidents involving death by suicide after harassment from loan operators. 

Many women have also borne the brunt of sexual harassment from collection agents. In some cases, pictures of a Mumbai woman were allegedly accessed by a loan app without her consent and morphed to recover money.

While there have been security , safety and privacy concerns over such apps, these illegal platforms have also come under regulatory scanner for charging exorbitant rates of interest and without any enforcement purview. 

Such has been the quantum of incidents involving digital lending apps that the centre banned scores of lending platforms, largely in connection with Chinese nationals and entities. Many homegrown players were also impacted, but their services were restored after MeitY’s intervention. 

Enforcement agencies have cracked down as well. ED provisionally attached assets worth INR 106 Cr belonging to several lending app operators under the Prevention of Money Laundering Act, 2002. RBI is also said to have formulated a whitelist of lending apps which prompted the recent ban on lending apps. 

Digital lending is a huge market and saw 1.8 Cr disbursals worth INR 18,537 Cr in Q3 FY23, up 147% and 118%, respectively, over the corresponding period last year. The growth has primarily been led by emerging lendingtech startups, which have spurred the space with new offerings and smaller ticket sizes. 

Inc42 estimates the homegrown digital lending space to surge to $1.3 Tn by 2030, growing at a CAGR of 22% between 2022 and 2030.