MHA Asks States & UTs To Take Strict Action Against Chinese Loan Apps

The Ministry of Home Affairs (MHA) has written to various states and Union Territories asking to take strict actions against the Chinese lending apps. The MHA took this action on the backdrop of rising suicide incidents led by the Chinese loan apps. 

In the letter, the MHA said that the Chinese lending apps have impacted the country’s security, economy and citizen safety. It further stated that these apps use loan borrowers’ personal data such as contacts, location, photos and videos for blackmailing and harassment, Times of India reported.

The ministry stated that low-income classes are mainly at risk from the Chinese lending apps as they offer quick loans to people. Nonetheless, the loans provided by these apps involve high-interest rates and other hidden expenses. 

Luring People On The Grab Of Easy Money

The Chinese lending apps are not regulated by the RBI. They are massively employing bulk SMS, digital adverts, chat messengers and mobile app stores to catch online users’ attention, the ministry informed. 

While availing loans from these lending apps, users or loan borrowers have to give access to their contacts, location, and phone storage

“This data is misused to harass and blackmail the citizens using morphed images and other abusive practices by recovery agents located in India as well as overseas violating RBI’s Fair Practices Code,” the ministry said in the letter.

Upon investigation, the ministry found that this (malpractices of lending apps) is a cyber crime carried out through temporary email addresses, virtual numbers, fake accounts, payment aggregators, API services and cryptocurrency, among others.

Therefore, the home ministry advises other states and Union Territories to seek cybersecurity experts help while probing Chinese lending apps.

“All states and UTs are requested to take strict legal action in this regard. Further, all states and UTs are also requested to spread mass awareness in all districts against the risks of using such apps,” it said.

The ministry further informed that law enforcement agencies can avail the services of the Indian Cyber Crime Coordination Center’s vertical National Cyber Crime Forensic Laboratory (NCFL) and Centre for Internet and Society (CIS) Division for taking technical assistance to analysis loan apps, malwares and tracing cryptocurrency transactions. 

The development has come at a time when the Ministry of Corporate Affairs is currently probing directors and key executives of Chinese companies that are registered in India. The probe is carried out to identify shell companies that these Chinese directors and C-level executives are heading in the country. 

The anti-money laundering body Enforcement Directorate (ED) is also probing Chinese lending apps. This month, the ED searched the premises of Razorpay and Indian banks in relation to Chinese loan apps and also seized INR 78 Cr funds parked in the bank accounts and Razorpay by the lending apps.

Besides, the Hyderabad police also seized INR 903 Cr funds in a money laundering case involving a shell Chinese company. 

Earlier this year, the home ministry also reported that 348 Chinese apps were illegally collecting and transferring user data from India to their home country.

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