SUMMARY
BuddyLoan, CashTM, Indiabulls Home Loans, PayMe, Faircent and RupeerRedee are also on MeitY’s list, sources said
The government is also targeting apps against which complaints have been received about harassment
MeitY is banning 94 loan apps and 138 betting apps as part of its crackdown
Several Indian lending apps have also been banned by the Ministry of Electronics and Information Technology (MeitY) as part of its crackdown on Chinese loan apps. The likes of Ola’s Avail Finance, loan app TrueBalance and soonicorn KreditBee’s clone are on the government’s list of apps which have been banned, sources told Inc42.
The lending apps ban is part of the government’s crackdown on betting and lending apps with Chinese links, which has resulted in bans on 94 loan apps and 138 betting apps. On Monday, it was reported that LazyPay and Kissht were also among the lending apps banned by the ministry.
BuddyLoan, CashTM, Indiabulls Home Loans, PayMe, Faircent and RupeerRedee are the other apps on the list. The sources said that Bengaluru-based DreamLoan and CreditDay are also on the list.
A KreditBee spokesperson told Inc42 that the banned link is on Aptoide, adding, “Aptoide is a third-party App Store, with which we have no formal or informal partnership. We are speculating that it’s a proxy app on Aptoide, and investigating this further. Blocking of the Aptoide link is a favourable outcome for us.”
Further, sources close to TrueBalance said that the app on the list was not of the company, adding that it has not received any communication from MeitY.
While it was widely reported on Monday that Kissht was among the apps banned, its founder Ranvir Singh denied it. “The Kissht app and website are working for its customers. We are aware that Google has been asked to take down a list of companies from the Play Store that includes our company but uncertain about the cause of such notification. We are meeting officials today to seek clarification. Kissht has no Chinese stakeholders,” Singh told Inc42.
A PayMe spokesperson noted, “There has been some confusion surrounding PayMe India being blocked. The company would like to clarify that this is not true. A dubious app by the name of ‘paymeindia.en’ on Apptoid has been blocked, as it was impersonating PayMe.”
Many of the apps on the list have Chinese investors. KrediBee, which recently raised a $100 Mn funding round, had Chinese companies Xiaomi, Kunlun, and Shunwei Capital on its captable. However, all those investors exited in 2021.
Meanwhile, PayMe is backed by investors based in Dubai and Singapore.
Avail Finance, which was acquired by Ola last year, does not have Chinese investors but its parent company has had Chinese investors in the past. Ola recently shut down the Avail Finance app and integrated it with Ola Money.
However, as per the sources, MeitY’s crackdown is not limited to apps with Chinese links. The ministry is also targeting apps against which a large number of complaints have been received from users about harassment and the use of strong-arm collection tactics.
The upheaval in India’s digital lending landscape has prompted the Digital Lenders Association of India (DLAI) to approach MeitY over the issue. The industry body said that it has not received any communication from the government so far.
In a statement, a DLAI spokesperson said, “We are in the process of collating information from our members and other industry associates about the details. We will approach MeitY and other relevant authorities to understand the matter in detail and implement requisite action points if required.”
The rise in digital penetration has also resulted in a sharp increase in the number of complaints against digital lending platforms over the last few years for harassing and intimidating their users. In many cases, the pressure tactics deployed by these platforms have also resulted in users taking extreme measures like taking their lives
Most of these cases involved lending apps linked to China or being operated by overseas entities based in either China or Hong Kong. The Enforcement Directorate is also investigating several lending apps with Chinese links.
As per the investigative agencies, these entities are fronts to launder money. Many of these China-linked apps were also found to be charging extortionate amounts of interest from Indian customers.
Last year, Finance Minister Nirmala Sitharaman tasked the RBI and MeitY to devise measures to ensure that only whitelisted loan apps are available on app marketplaces.
The development about the presence of Avail Finance and KreditBee, among others, on MeitY’s list, was first reported by YourStory.
Update | February 7, 2023, 8:00 PM
The story and the headline have been updated to reflect the statements issued by KreditBee, Kissht, PayMe and TrueBalance.
