Finance Minister Nirmala Sitharaman chaired a meeting on ‘illegal loan apps’ on Friday, and outlined steps to prevent the operations of such apps. The minister discussed various issues related to such illegal loan apps outside the regular banking channels.
It was decided during the meeting that RBI will prepare a whitelist of all legal apps and MeitY will ensure that only those are hosted on app stores. The RBI will also monitor ‘mule/rented’ accounts that may be used for money laundering and to review/cancel dormant NBFCs in order to avoid misuse.
RBI will ensure that the registration of payment aggregators are completed within a timeframe. No unregistered payment aggregators will be allowed to function. The MCA will identify shell companies and de-register them.
The Finance Minister said that steps should be taken to increase cyber awareness for customers, bank employees, law enforcement agencies and other stakeholders. All ministries and agencies will take all possible actions to prevent operations of such apps.
Apart from the minister, the Finance Secretary at the Ministry of Finance, Secretary of Economic Affairs, Secretary of Revenue & Corporate Affairs (Addl. Charge), Secretary of Financial Services, Secretary of Electronics & Information technology, Deputy Governor of RBI and Executive Director of RBI also attended the meeting.
Sitharaman expressed concerns on the increasing instances of illegal loan apps that offer loans and micro credits especially to the vulnerable and low-income group at exorbitant high interest rates. These loans also have hidden charges, and predatory recovery practices such as blackmailing, criminal intimidation are used to recover these loans.
The minister also spoke of 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.
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