The proliferation of illegal loan apps has become a growing concern, trapping unsuspecting individuals in a cycle of harassment and financial exploitation. In response, the Government of India, through various ministries and regulatory bodies, has taken proactive measures to combat this menace. This article delves into the steps initiated by the Ministry of Finance and other stakeholders to address the issue and sensitize the public about fraudulent loan apps.
Detailed Analysis
1. Regulatory Framework: The Ministry of Finance, in collaboration with the Reserve Bank of India (RBI) and other regulators, is actively engaged in controlling illegal loan apps. Regulatory guidelines issued by the RBI aim to firm up the regulatory framework for digital lending, enhancing customer protection and ensuring the safety of the digital lending ecosystem.
2. Enforcement Actions: RBI and other concerned authorities have taken decisive actions to remove unauthorized loan apps from mobile platforms. Through coordinated efforts, over thousands of loan apps have been suspended or removed from the Play Store, reducing the potential for exploitation and fraud.
3. Awareness Initiatives: The government has launched awareness campaigns to educate the public about cybercrimes, including the dangers posed by illegal loan apps. Initiatives include disseminating cyber safety tips through social media, publishing handbooks, and organizing cyber safety awareness weeks in collaboration with states and union territories.
4. Reporting Mechanisms: To facilitate the reporting of cyber incidents, including illegal loan apps, the Ministry of Home Affairs has launched the National Cybercrime Reporting Portal and a dedicated helpline number. These platforms enable citizens to report incidents and seek assistance promptly.
5. Collaborative Efforts: Collaboration between regulatory bodies, law enforcement agencies, and technology platforms is crucial in combating illegal loan apps effectively. Measures such as whitelisting regulated entities and deploying strict policy requirements on app stores contribute to a safer digital lending environment.
Conclusion
The Government of India, cognizant of the threats posed by illegal loan apps, has taken decisive steps to address the issue. Through regulatory interventions, enforcement actions, awareness campaigns, and collaborative efforts, the government aims to protect consumers from exploitation and ensure the integrity of the financial ecosystem. Continued vigilance and proactive measures are essential to curb the proliferation of illegal loan apps and safeguard the interests of the public.
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF FINANCIAL SERVICES
RAJYA SABHA
UNSTARRED QUESTION NO-402
ANSWERED ON TUESDAY, FEBRUARY 6, 2024/ 17 MAGHA, 1945 (SAKA)
ILLEGAL LOAN APPS
402. SHRI RAJEEV SHUKLA:
Will the Minister of Finance be pleased to state:
(a) whether the Ministry is aware of illegal loan apps trapping people leading to cycle of harassments;
(b) if so, whether the Ministry has any data on the number of such loan apps;
(c) the actual number of loan apps removed from mobile platforms during the last two years; and
(d) the steps taken by the Ministry to sensitize general public on fraudulent loan apps?
ANSWER
THE MINISTER OF STATE IN THE MINISTRY OF FINANCE
(DR. BHAGWAT KARAD)
(a) to (d): The Government is constantly engaged with Reserve Bank of India (RBI) and other concerned Regulators/stakeholders with the objective to control illegal loan apps. The objective is to remain proactive, maintain cyber security preparedness with constant vigil and take appropriate & timely action, to mitigate any such vulnerabilities in the Indian financial system. As part of this exercise, RBI vide letter dated 09.10.2022 and e-mail dated 19.01.2023 had shared a list of 442 unique digital lending apps used by the regulated entities with Ministry of Electronics & Information Technology (MeitY) for the purpose of whitelisting and the same was shared with Google. As per the information received from MeitY, during April 2021 – July 2022, Google had reviewed approximately 3500 to 4000 loan apps and suspended / removed over 2500 loan apps from its Play Store. Similarly, during September 2022 – August 2023, over 2200 loan apps were removed from the Play Store. Further, Google has updated its policy regarding enforcement of loan apps on the Play Store and only those apps are allowed on the Play Store which are published by Regulated Entities (REs) or those working in partnership with REs. It has also deployed additional policy requirements with strict enforcement actions for loan apps in India.
RBI has issued regulatory guidelines on digital lending, which aims at firming up the regulatory framework for digital lending, while enhancing customer protection and making digital lending ecosystem safe and sound. The Indian Cyber Crime Coordination Centre (I4C), Ministry of
Home Affairs (MHA) has been proactively analysing the digital lending apps on a continuous basis.
In order to facilitate the citizens to report cyber incidents including illegal loan apps, MHA has launched a National Cybercrime Reporting Portal (www.cybercrime.gov.in) as well as a National Cybercrime Helpline number “1930”.
To spread awareness against cybercrimes including by illegal loan apps, the Government has been taking various initiatives from time to time. which, inter-alia, includes cyber safety tips through social media accounts, publishing of handbook for adolescents/students, publishing of ‘Information Security Best practices’ for the benefit of government officials, organizing cyber safety and security awareness weeks in association with States/Union Territories etc.
In addition to these, RBI and Banks have also been taking cybercrime awareness campaigns through dissemination of messages on cyber-crime through short SMS, radio campaign, publicity on prevention of ‘cyber-crime’. Further, RBI has been conducting electronic-banking awareness and training (e-BAAT) programmes which focuses on awareness about frauds and risk mitigation.
