• Home
  • Apps
  • Apps News
  • RBI to Prepare ‘Whitelist’ of Approved Instant Finance Apps Amid Proliferation of Illegal Loan Apps

RBI to Prepare ‘Whitelist’ of Approved Instant Finance Apps Amid Proliferation of Illegal Loan Apps

Several low-income Indians have, off late, found themselves being trapped by unlawful loan apps and have ended up getting exposed to risks.

RBI to Prepare ‘Whitelist’ of Approved Instant Finance Apps Amid Proliferation of Illegal Loan Apps

Photo Credit: Reuters

Sitharaman met with RBI and finance ministry officials to discuss issues related to illegal loan apps

Highlights
  • It's unclear by when would the RBI release this list
  • Indian law enforcement authorities are cracking down on loan apps
  • Only RBI-approved instant loan apps will operate once list is released

In recent days, the law enforcement agencies of India have been tracking and tracking risky loan apps that have been operating in the country unlawfully. Finance Minister Nirmala Sitharaman has taken notice of these fraudulent instant loan apps and has directed the Reserve Bank of India (RBI) to prepare a ‘whitelist' of instant finance apps, that are genuinely clear to operate in the nation. Several low-income Indians have, off late, found themselves being trapped by predatory loan apps and have ended up getting exposed to dangerous financial and physical risks.

Once the whitelist is prepared, India's Ministry of Electronics and Information Technology (MeitY) will ensure that only the apps with RBI clearance will feature on application stores.

“RBI will ensure that registration of payment aggregators be completed within a timeframe and no un-registered payment aggregator be allowed to function after that. Steps should be taken to increase cyber awareness for customers, bank employees, law enforcement agencies and other stakeholders,” the government said in a press release.

The decision comes a day after Sitharaman chaired a meeting with RBI and finance ministry officials to discuss various issues related to ‘illegal loan apps' that have been operating in the country under the nose of the regular banking channels.

As part of the meeting, Sitharaman also expressed concerns regarding the predatory recovery practices that these illegal loan apps have been resorting to. These include blackmailing and criminal intimidation.

“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,” the government's press release added.

Earlier last week, India's financial watchdog, the Enforcement Directorate (ED) raided six online payment gateway locations in Bengaluru due to alleged irregularities in mobile app-based loans that were ‘managed' by Chinese individuals. The police also seized Rs. 17 crore from the raided firms that included Razorpay, Paytm, and Cashfree among others.

Sitharaman's decision to have the RBI make a whitelist of finance apps has seemingly been triggered by these raids.

In fact, on Friday, September 9 itself, Andhra Pradesh Chief Minister YS Jagan Mohan Reddy asked state officials to take action against online money-lending apps after a couple from Rajahmundry in the East Godavari district died by suicide earlier this week due to harassment by the agents of a loan app.


Apple unveiled eight new products at its September 'Far Out' event. Which ones will float — and which will sink? We discuss this on Orbital, the Gadgets 360 podcast. Orbital is available on Spotify, Gaana, JioSaavn, Google Podcasts, Apple Podcasts, Amazon Music and wherever you get your podcasts.
Affiliate links may be automatically generated - see our ethics statement for details.
Comments

For the latest tech news and reviews, follow Gadgets 360 on Twitter, Facebook, and Google News. For the latest videos on gadgets and tech, subscribe to our YouTube channel.

Radhika Parashar
Radhika Parashar is a senior correspondent for Gadgets 360. She has been reporting on tech and telecom for the last three years now and will be focussing on writing about all things crypto. Besides this, she is a major sitcom nerd and often replies in Chandler Bing and Michael Scott references. For tips or queries you could reach out to her at RadhikaP@ndtv.com. More
iPhone 14 Series Pre-Orders Begin in India: Price, Offers, and All You Need to Know
Read in: हिंदी
Share on Facebook Tweet Snapchat Share Reddit Comment google-newsGoogle News

Advertisement

Follow Us

Advertisement

© Copyright Red Pixels Ventures Limited 2023. All rights reserved.