Officials flagged multiple distribution channels such as websites and other means of downloads and directed Google to clamp down on these avenues
Google directed to introduce tougher checks and balances to weed out unauthorised digital lending apps, the report said
Google has also started acting on complaints received from industry bodies
The Indian government and the Reserve Bank of India (RBI) have reportedly directed tech giant Google to introduce stricter norms to curb usage of unauthorised digital lending apps in the country.
Officials flagged multiple distribution channels such as websites and other means of downloads and directed the tech giant to clamp down on these avenues, Reuters reported citing sources.
A source privy to the development also said that Google has started acting on complaints received from industry bodies.
“Earlier Google would not respond to complaints on individual apps. Now they are more proactive and do look into it when a complaint is flagged to them,” the source was quoted as saying.
In addition, the search giant has also been called to multiple meetings conducted by the government and the RBI on the issue. Multiple sources said that the US-based company was directed to introduce tougher checks and balances to weed out unauthorised digital lending apps.
Responding to a query, a Google spokesperson told Reuters, “We have removed over 2,000 personal loan apps targeting India from the Play Store for violation of the Play policy requirements…We will continue to engage with law enforcement agencies and industry bodies to help address this issue.”
It is pertinent to note that the matter of illegal loan apps largely comes under the ambit of the RBI and it sets the larger discourse on the matter. While the central bank requires lending apps listed on app marketplaces to be backed by regulated entities, it is largely entrusted upon Google to monitor and enforce compliance.
RBI Tightens Screws
The news comes at a time when the RBI has stepped up checks and balances against unauthorised digital loan sharks. Earlier this month, Finance Minister Nirmala Sitharaman directed the RBI and the Ministry of Electronics and Information Technology (MeitY) to ensure that only whitelisted loan apps are available for download on Google Play Store and Apple App Store.
Essentially, only RBI-approved loans apps will be available on app marketplaces. As part of its crackdown on illegal loan apps, the RBI will also monitor ‘mule/rented’ accounts that could be used for money laundering and will also review or cancel dormant NBFCs to avoid their misuse.
This comes months after the central bank released its much-awaited digital lending guidelines to address issues of the evolving ecosystem.
The onslaught of regulation could largely be attributed to the growing incidents of predatory recovery practices employed by these companies and high interest rates charged by the digital loan sharks. In addition, the RBI is also concerned about money laundering and the mounting influence of Chinese nationals who operate many of these apps.
The Centre’s bid to rope in Google is largely a result of the tech giant’s near total monopoly over the Indian app marketplace market. Google’s Android operating system accounts for 95% of the total Indian market.
Many of the unauthorised lending apps list on these app marketplaces and then bombard customers with loan offers. Many of these platforms also use Google and Facebook’s advertising platforms to target customers.
According to Inc42, India’s total addressable fintech market is expected to hover around the $1.3 Tn mark by 2025. A majority of this will be led by the country’s burgeoning lendingtech segment, which is expected to account for 46% or $616 Bn of the total market opportunity.