Google is stepping up scrutiny for lending apps in India.
In a July 28 announcement, Google said Indian lending apps will have to fill out a “Personal Loan App Declaration” form, and provide supporting documentation such as a license from the Reserve Bank of India (RBI), or proof that the app is only a platform serving as a middle-man for registered non-banking financial companies (NBFCs) or banks. These players must also ensure the developer account name reflects the name of the associated registered business name in the declaration.
These new rules are applicable only to companies in India. Worldwide, any app offering personal loans on Google Play has to just set its category to finance and clearly disclose data about the period of repayment, interest rates, fees, privacy policy, and more.
The last date to comply with these new India-specific norms and stay listed on the app store is Sept. 15.
In January this year, the Mountain View behemoth removed several personal loan apps in India at RBI’s behest for breaching loan repayment terms and user safety policies. At least 118 apps were removed, according to Srikanth L of CashlessConsumer, a consumer collective on digital payments. The crackdown came at the heels of user complaints.
Users have voiced concerns about high interest rates and short repayment periods with some of these apps. Play Store rules state only apps with repayment post 60 days are allowed.
Those who have taken loans via these apps have also reported rampant misuse of personal data and fraudulent and unlawful practices of physical threats and other forms of coercion for the recovery of loans. Some harassed customers were even pushed to suicide.
