Online loan crackdown: FM Nirmala Sitharaman says 2,500 apps removed by Google from Playstore

Amid growing concerns about the widespread fraudulent activities of online loan companies, Indian finance minister Nirmala Sitharaman said that Google has removed over 2,500 loan applications from Playstore. 

In a written reply to Lok Sabha, Sitharaman said that the central government is continuously engaging with the Reserve Bank of India and other regulators to control and eliminate these fraudulent loan apps. 

According to Sitharaman, the primary objective of the central government is to remain proactive, maintain cyber security preparedness with constant vigilance, and take appropriate and timely action to mitigate any vulnerabilities the country is facing. 

Central government taking strict actions against fraudulent loan apps

In the written reply, Sitharaman further pointed out that the apex bank of India has already sent a list that features a whitelist of apps which are operating by abiding by the guidelines proposed by the government. 

This list was shared with Google by India's Ministry of Electronics and Information Technology, and upon analysis, the tech giant has removed 2,500 fraudulent loan apps from its Play Store between April 2021 and July 2022.

"Between April 2021 and July 2022, Google also reviewed approximately 3,500 to 4,000 loan lending apps and suspended or removed over 2,500 fraudulent loan apps from its Play Store," said Sitharaman. 

The finance minister added that Google has recently updated its policy regarding enforcement of loan lending apps and has also deployed strict policy requirements for online lending applications operating within India. 

According to Sitharaman, the Central government is engaged in various activities to promote awareness among people regarding online lending applications. 

Online loan apps gained prominence during Covid

It was during the time of the Covid outbreak that online loan apps gained massive popularity in India. During this time, several people who remained unemployed embraced online loan apps for their financial needs, and many of them became prey to these fraudulent lenders. 

Several borrowers claim that these fraudulent online loan apps have a notorious history of charging unethical interest rates, and they even used to threaten borrowers to pay exorbitantly high interest rates.

These lenders also used to adopt predatory recovery practices, which resulted in the suicides of several people all across the nation. 

In 2021, a separate investigation conducted by RBI had found that over a thousand apps are operating in India illegally, targeting people in low-income income groups.

"From sending threatening and obscene Whatsapp messages to character assassination, these digital lending apps are a real threat to society," said Advocate Jiyas Jamal, founder of Cyber Suraksha Foundation and a leading cybersecurity expert. 

He added: "The government should take all the necessary steps to impose regulations. It is the need of the society, and it will surely save several lives who are now on the verge of suicide."