RBI Set To Prepare White List To Crack Down Illegal Loan Apps

Reserve Bank of India (RBI) set to prepare a white list in order to crack down the illegal loan apps. Finance Minister (FM) Nirmala Sitharaman asked the RBI to approve a 'white list' of legal digital lending apps that will terminate the illegal apps that are exploiting customers.

As the government decided, the Ministry of Electronics and Information Technology will further ensure that only the legal and approved apps will be hosted on app stores. FM mentioned in a statement, "The finance minister expressed concern about increasing instances of illegal loan apps offering loans/micro credits, especially to vulnerable and low-income group people at exorbitantly high-interest rates and processing/hidden charges, and predatory recovery practices involving blackmailing and criminal intimidation."

The RBI issued guidelines in the last month for digital lending platforms to protect customers from any fraud, after complaints that lending apps were charging usurious rates, etc. Last Thursday, the union government in a meeting decided to roll out this white list. RBI will also be monitoring the 'mule/rented' accounts that are used for money laundering, along with reviewing or canceling inactive NBFCs to avoid misuse. Secretaries from the finance, corporate affairs, and information technology Ministry, and major RBI officials were present at the meeting. The government is strictly concerned about tax evasion, breach of data privacy, and misuse of unregulated payment aggregators, etc., to protect customers.