SUMMARY
The Mumbai Police reportedly found that the app developers and fintech companies that floated instant loan apps with Chinese links exploited a number of loopholes in the Play Store
Google has been asked to not allow the Play Store to be used by lenders who offer instant loans for fewer than 62 days
Digital instant loan apps are under government’s radar, and recently Google updated its policy for such apps on the Google Play Store in India
The Mumbai Police has reportedly asked tech giant Google to bring additional safeguards and tweak its Play Store policy to curb the misuse of the app store by dubious loan apps.
The city police found that the app developers and fintech companies that floated instant loan apps with Chinese links exploited a number of loopholes in the Play Store, ET reported.
The representatives of Google India were called for a meeting with Mumbai Police in which the tech giant was asked to tighten its systems to curb instant loan apps with Chinese links.
“During the course of the probe, it was found that there were certain loopholes in their system which were exploited by the accused while using Google to host either their links or mobile-based applications,” a senior police officer was quoted as saying in the report.
Google has been asked not to allow the platform to be used by lenders who offer instant loans for fewer than 62 days.
Recently, Google updated its policy for loan apps on the Google Play Store in India. As per the updated policy, such apps need to prominently display a link to the partner bank or non-banking finance company (NBFC).
Google updated the policy on September 5, 2022 and gave a deadline till September 19, 2022 for such apps to comply with it. The US-based company said that it would delist those apps from the Play Store which don’t comply with the updated policy.
The pandemic led to a sharp surge in the use of the instant loans apps which are accused of charging exorbitant interest rates and using predatory recovery practices.
The Enforcement Directorate is also conducting a probe in the case and has alleged that many of these digital loan apps were operated by Chinese nationals or entities with links to China. The agency has conducted raids at many cryptocurrency exchanges and merchant gateways as part of its investigation. It has alleged that the operators of these apps used the crypto exchanges to transfer the “proceeds of crime” outside India.
The increasing instances of use of high handed recovery practices by these loan apps have also brought them under the scanner of the government and the Reserve Bank of India (RBI).
Finance Minister Nirmala Sitharaman recently directed the RBI and the Ministry of Electronics and Information Technology (MeitY) to ensure that only whitelisted digital lending apps are available on the app marketplaces, Google Play Store and the Apple App Store.
The booming Indian fintech market is expected to reach a size of $1.3 Tn by 2025, growing at a compound annual growth rate of 31% during 2021-2025. Of this, the lendingtech segment is expected to account for 47% or $616 Bn of the total market opportunity, according to an Inc42 report.
