Google Faces Pressure In India To Help Curb Illegal Lending Apps: Report

Mumbai:

According to sources, Alphabet Inc’s Google has been asked by the government and the central bank to introduce more stringent checks to help curb the use of illegal digital lending applications in India.

Although Google does not fall under the purview of the Reserve Bank of India (RBI), the US tech giant has been called to meetings by the central bank and the government several times over the past few months to introduce stricter checks and balances. Emphasis is placed on According to four sources, such apps can help eliminate them.

Regulators have already asked lenders to check against illegal lending apps, which have become popular during the pandemic. Regulators try to control the spread of apps that engage in unethical activities such as charging excessive interest rates and fees or collection methods not authorized by the central bank or money laundering and other government Violating the guidelines.

Google said last year it revised its Play Store developer program policy for financial services apps, requiring additional requirements for personal loan apps effective September 2021.

“We have removed over 2,000 India-targeted personal loan apps from the Play Store for violating Play’s policy requirements,” a Google spokesperson said, adding that if its Actions are taken if policies are violated.

“We will continue to engage with law enforcement and industry to help resolve this issue,” the spokesperson added.

While the central bank requires that any lending apps listed on app stores are backed by regulated entities, it is up to Google to enforce this and monitor compliance.

Google has also been asked to consider mitigating the rise of such apps through other distribution channels such as websites and other sources of downloads, another industry source directly involved.

Google is also starting to process complaints received from industry bodies.

“Earlier Google didn’t respond to complaints on individual apps. Now they are more proactive and review when complaints are made,” said one of four industry sources directly involved in the matter. and who has been briefed on the negotiations. With Google.

The government and RBI are in the process of preparing a white list of approved loan applications. The central bank has also laid down norms to ensure that the borrower should deal directly with the bank for lending and recovery which can help keep third party recovery agents at bay.

Google dominates the app market with 95% of smartphones using its Android platform.

The Ministry of Electronics and Information Technology and the RBI did not immediately respond to an email request seeking comment.

New Advertising Policy

The digital lending market has grown rapidly and is expected to facilitate $2.2 billion in digital loans in 2021-22. It’s unclear how much of that is through apps engaging in illegal practices.

These lenders often reach consumers through advertisements on platforms like Facebook and Google.

Starting next month, Google will roll out a new advertising policy for financial services in India, according to a blog post on its website.

The policy says that advertisers need to be verified in the country to show financial services ads in India. As part of verification, advertisers must demonstrate that they are licensed by the relevant financial services regulator, the blog says.