Loan apps will soon be controlled by India's government. This decision was announced after the Finance Ministry officials met on Sept. 8.
For the past months, Indian authorities have been trying to prevent loans and other lending applications from implementing unethical payment collection methods and exorbitant fees.
The Reserve Bank of India, the country's central bank, also said it would launch new guidelines for digital lending.
These new policies are expected to force loan apps to provide better transparency and disclosure, which will certainly benefit consumers.
Loan Apps to be Controlled by India!
According to TechCrunch's latest report, India's central bank will create a new whitelist for all legal lending applications.
On the other hand, the country's IT ministry said that they would ensure that the whitelisted applications are the only digital lending services that will be hosted on all app stores, such as Google Play Store and Apple App Store.
"The Finance Minister expressed concern on increasing instances of Illegal Loan Apps offering loans/micro credits," said the Ministry of Finance via their official document.
Meanwhile, the central bank said it would monitor "mule" accounts if they are found guilty of money laundering. Involved non-banking financial institutions will also be reviewed.
If they are proven to take part in money laundering activities, their licenses can be canceled.
The Rise of Lending Apps in India
For the past few years, the popularity of lending applications in India has increased rapidly. This is because many of them allow customers to borrow money without needing a credit score.
However, everything comes at a price. Commonly, these loan apps will use unethical means to collect borrowed money from their consumers.
Because of this, India's law enforcement agencies conducted hundreds of arrests after people complained that these lending apps harassed and abused them to collect money.
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On the other hand, rumors claimed Instagram's Shopping page was being removed.
For more news updates about lending and other applications, keep your tabs open here at TechTimes.
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Written by Griffin Davis
