Google India has removed several personal loan apps from its Play Store that are in violation of its safety policies and Reserve Bank of India's (RBI's) guidelines.
India's banking regulator had earlier conveyed its misgivings over the proliferation of unregulated fintech apps on Google Play Store and advised them to take the errant applications down.
"We have reviewed hundreds of personal loan apps in India, based on flags submitted by users and government agencies. The apps that were found to violate our user safety policies were immediately removed from the Store, and we have asked the developers of the remaining identified apps to demonstrate that they comply with applicable local laws and regulations," Google India said in a blogpost.
Google did not specify the number of lending apps that have been kicked out, but sources in the industry say that around 30 apps may have got the chop.
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Modus operandi of online loan sharks
Quite typically, many of these apps are from fly-by-night operators, and target vulnerable borrowers by offering loans at usurious interest rates and then using extreme measures for recovery of money.
Many of these apps levy exorbitant processing fees, as high as 2,000 rupees on loans of less than 10,000 rupees with tenures of 30 days or under. In the event, borrowers end up paying interest rates as high as 60% per week.
Banks in India, on the contrary, offer personal loans with annual interest rates of 10-20%, and they usually do not have to be repaid in full for at least a year.
Chinese threat here, too
The Google Play Developer Policy now requires financial services apps that offer personal loans to disclose key information such as the minimum and maximum periods of repayment, the maximum annual percentage rate, and a representative example of the total loan cost.
The RBI, for its part, has constituted a working group to suggest regulatory measures to promote orderly growth of digital lending amid rising incidents of harassments relating to online lending.
Three apps, 10MinuteLoan, Ex-Money and Extra Mudra, were removed from the Play Store a few days back. Among the aps taken down in the fresh drive are LazyPay, Cashguru, Rupeeclick and Finance Buddha.
Many of these apps, as it happens, have Chinese connection. And that is another angle of fight for the Indian authorities.
Police in various Indian States have increased their drive against these online loan sharks. A few Chinese have also been taken into custody.
Via: Google India
