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RBI Will Issue Whitelist of Lending Apps Allowed On Google Play and Apple App Store: Finance Ministry

RBI will prepare a whitelist of legal lending apps and MeitY will ensure that only these apps are hosted on Google Play and Apple App Store.

What's the news: The Reserve Bank of India (RBI) will prepare a whitelist of all legal lending apps and the Ministry of Electronics and Information Technology (MeitY) will ensure that only these whitelisted apps are hosted on app stores like Google Play and Apple App Store, the Ministry of Finance said in a press release issued on September 9, following a meeting held with various government departments to discuss various issues related to illegal loan apps. "The Finance Minister expressed concern on increasing instances of Illegal Loan Apps offering loans, microcredits, especially to vulnerable & low-income group people at exorbitantly high-interest rates and processing/hidden charges, and predatory recovery practices involving blackmailing, criminal intimidation etc. Smt. Sitharaman also noted the possibility of money laundering, tax evasions, breach/privacy of data, and misuse of unregulated payment aggregators, shell companies, defunct NBFCs etc. for perpetrating such actions." — Press Release Why does this matter: Given the rising number of complaints concerning unauthorised digital lending apps (especially apps of Chinese origin) that are targeting vulnerable Indian borrowers, charging them exorbitant interest rates, and resorting to extortion and blackmail tactics to collect payments, there has been pressure on the government from all sides to take concrete action. Last week, the RBI issued digital lending guidelines that address some concerns, but a whitelist of legal apps is a far more significant step because it effectively disallows any lending app that is not approved by the RBI. However, it remains to be seen as to how this will work in practice and whether…

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