The Ministry of Electronics and Information Technology (MeitY) is in consultation with Google Play to explore ways for curbing malpractices by digital lending apps. The development comes in the backdrop of a law recommended by the Reserve Bank of India (RBI) banning unregulated lending activities in a bid to safeguard borrowers from predatory lending, harassment, and blackmail.
In its regulatory framework, the RBI mandated the loan disbursal to only be carried out by entities regulated by it or those permitted under the law. The central bank also mentioned that the digital loans must be credited directly to the bank accounts of borrowers and not through any third party. This has in turn created a need for a mechanism for the apps to produce their licence to app stores. Meanwhile, Google Play is currently reviewing legal aspects of the order.
