Tech giant Google Inc. has reviewed around 3,500 to 4,000 loan lending apps operating in the country, and suspended or removed over 2,500 fraudulent loan apps from its Play Store between April 2021 and July 2022, Parliament was informed on Monday.
Finance Minister Nirmala Sitharaman, replying to a query on steps taken by the government to address the increasing risks associated with fraudulent loan apps, in the Lok Sabha, said the government is engaged with RBI and other regulators or stakeholders to control fraudulent loan apps.
"The matter is also regularly discussed and monitored in the meetings of the Financial Stability and Development Council (FSDC). 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," the statement says.
On the steps taken to curb loan-related frauds, Sitharaman says the RBI has mandated regulated entities to disclose the upfront annual percentage rate (APR) as an all-inclusive cost of digital loans for the borrower. Loan providers also can't charge any fee, charges, etc., from the borrower and the same must be paid directly by the REs.
Moreover, she says the RBI has shared a “whitelist” of legal apps with the Centre, which has been further shared with Google, whose app store is the primary source of distribution of digital lending apps. "Google has updated its policy regarding enforcement of loan lending apps on the Play Store and has also deployed additional policy requirements with strict enforcement actions for Lending Apps in India."
As per their revised policy, only those apps are allowed on the Play Store which are published by regulated entities, or those working in partnership with REs.
On the rising number of personal loan applications in the country, minister of state in the finance ministry, Bhagwat Karad, says so far in FY 2023-24, 40,85,168 person loans have been outstanding of select 40 scheduled commercial banks. The number was 33,86,982 in FY23 and 30,09,013 in FY22.
He says the RBI issued the guidelines on digital lending on September 02, 2022, to ensure the lending service providers (LSPs) engaged by them and the digital lending apps (DLAs) comply with these guidelines.
Karad, while answering a query on loan defaulters in the country, says as of March 31, 2023, there were 2,05,58,528 non-performing assets (NPA) accounts in scheduled commercial banks, of which 2,04,21,889 accounts are those wherein quantum of NPA is less than or equal to Rs 5 crore.
He says for recovery of loans from defaulters, banks have taken actions through recovery mechanisms available such as filing a suit in civil courts or in debt recovery tribunals, action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, among others.
