India asks Google to act responsibly against illegal lending apps

India asks Google to act responsibly against illegal lending apps

According to sources, the Indian government and central bank have ordered Alphabet Inc.s Google LLC to enact more controls to limit the use of unauthorized digital lending services in India.

Although Google is not under the purview of the Reserve Bank of India (RBI), the central bank and the Indian government are said to have summoned several meetings with the American tech giant in recent months and urged it to employ more stringent checks & balances that might help eliminate such apps.

In the past, too, regulators in India have requested that lenders raise their scrutiny of the unlawful lending applications that became popular during the Covid-19 outbreak.

Additionally, regulators have strived to stop the spread of such applications that carry out dishonest activities such as charging exorbitant fees and interest rates, engaging in recovery techniques that are restricted by the central bank, or not adhering to money laundering and other legal requirements.

For those unversed, the Play Store developer program policy for financial services applications was amended last year by Google, and it now includes extra requirements for individual loan apps in India, which was initiated in September 2021.

A Google representative stated that they have withdrawn over 2,000 personal loan requests targeting India from the Play Store for infringement of the Play policy criteria. Further, he also quoted that such stringent steps are taken if company policies are breached.

The spokesman continued that the tech behemoth will keep working with law enforcement organizations and industry players to help address this issue.

It is worth noting that while India's central bank demands that any lending apps listed on app stores be endorsed by regulatory agencies, Google is responsible for enforcing and assuring its conformance.

Another source claims that Google has also been advised to investigate the spread of similar apps through other distribution networks, such as websites and other download options.

Interestingly, the company has also begun to respond to complaints brought on individual applications, which it used to refrain from doing earlier.

Source Credit: https://www.reuters.com/technology/exclusive-google-faces-pressure-india-help-curb-illegal-lending-apps-sources-2022-09-19/