The Centre and the Reserve Bank of India (RBI) will initiate a fresh set of measures to prevent operation of illegal loan apps in the country. This was decided at a meeting chaired by the Finance Minister Nirmala Sitharaman to discuss the issues related to “Illegal Loan Apps” outside the regular banking channels.
After detailed deliberations on legal, procedural and technical aspects on the issue, it was decided that the RBI will prepare a “Whitelist” of the legal Apps and MeitY would ensure only “Whitelist” Apps are hosted. The RBI would also monitor the ‘mule/rented’ accounts used for money laundering and review/cancel dormant NBFCs to prevent misuse.
It was decided that the RBI would ensure registration of payment aggregators completed within a timeframe and no un-registered aggregators are allowed to function thereafter. MCA will identify the shell companies and de-register them to prevent their misuse, an official release said.
Steps should be taken to increase cyber awareness for the customers, bank employees, law enforcement agencies and other stakeholders. All Ministries/Agencies to take all possible actions to prevent operations of such Illegal Loan Apps, it was decided.
FM concerned
At the meeting, the Finance Minister expressed concern on increasing instances of Illegal Loan Apps offering loans/micro credits, especially to vulnerable and low-income group people at exorbitantly high interest rates and processing/hidden charges, and predatory recovery practices involving blackmailing, criminal intimidation etc.
She also noted the possibility of money laundering, tax evasions, breach/privacy of data, and misuse of unregulated payment aggregators, shell companies, defunct NBFCs etc. for perpetrating such actions.
The meeting was attended by the the Finance Secretary, Ministry of Finance; Secretary, Economic Affairs; Secretary, Revenue, & Corporate Affairs (Addl. Charge); Secretary, Financial Services; Secretary, Electronics & Information technology; Deputy Governor, RBI; and Executive Director, RBI.
The Finance Ministry will monitor the actionable points for compliance on a regular basis..