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FM Sitharaman instructs RBI to prepare a whitelist of legal loan apps to be hosted on app stores

On Friday, Nirmala Sitharaman, the minister of finance, presided over a meeting on “illegal loan applications” and provided a list of measures to stop the use of these apps. 

The minister spoke about a number of difficulties relating to such unauthorised loan applications outside of the normal banking procedures.

It was decided at the conference that MeitY would make sure that only those apps were hosted on app stores, while RBI would create a whitelist of all authorised apps. 

In order to prevent misuse, the RBI will also keep an eye on “mule/rented” accounts that could be used for money laundering and review/cancel dormant NBFCs.

The RBI will make sure that payment aggregator registration is finished on schedule. There will be no unregistered payment aggregators permitted to operate. The MCA will identify and deregister shell firms.

The Finance Minister stated that actions should be taken to raise cyber awareness among customers, bank workers, law enforcement authorities, and other stakeholders. 

Along with the minister, other attendees included the Deputy Governor of the RBI and the Executive Director of the RBI, the Ministry of Finance’s Finance Secretary, the Secretary of Economic Affairs, the Secretary of Revenue & Corporate Affairs (Addl. Charge), the Secretary of Financial Services, and the Secretary of Electronics & Information Technology.

Sitharaman voiced alarm over the rising number of illegal lending apps that provide loans and microcredits, particularly to the weak and low-income group, at exorbitantly high-interest rates. These loans also include hidden fees, and unscrupulous techniques are utilised to recover them, including criminal intimidation and blackmail.

The minister also discussed the potential for money laundering, tax evasion, data breaches, and the abuse of unregulated payment aggregators, shell firms, failed NBFCs, etc. for carrying out such activities.

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