There have been rumors that the Indian government & the central bank have asked Alphabet Inc.’s Google to implement stricter checks on digital lending apps in India.
As per four sources, the Reserve Bank of India (RBI) has asked Google to meet multiple times in recent months to persuade the U.S. tech giant to provide stricter balances and checks which can help in weeding out certain applications, despite the fact that Google does not fall under the RBI’s ambit.
Indian authorities have already requested more monitoring of illegal loan apps, which gained traction during the outbreak. Some of these applications may participate in predatory lending practices, such as charging exorbitant interest rates and fees or engaging in recovery strategies that are not sanctioned by the central bank or which violate money laundering as well as other government guidelines.
According to Google, the company amended its Play Store developer program policy for financial services applications last year, with new regulations coming into force in September 2021 for private loan apps in India.
According to a Google spokeswoman, the company has taken action against more than 2,000 personal loan applications aimed at India for breaking its regulations.
“To assist address this issue, we will keep communicating with law enforcement as well as other business groups,” the representative said.
Google has the responsibility of enforcing and monitoring compliance with the Reserve Bank of India’s requirement that lending apps included in the app store be supported by licensed organizations.
According to a second industry source with firsthand knowledge of the situation, Google has also been urged to investigate ways to slow the spread of such programs through non-Google modes of dissemination, such as websites and alternative download methods.
“Earlier, Google would ignore customer feedback on specific apps. Now, when a complaint is made, they actively investigate it “According to one of four industry sources involved in the case and briefed on negotiations with Google.
The government and RBI are currently working on compiling a list of pre-qualified loan applicants. The central bank has established regulations to discourage the use of third-party recovery agents by requiring borrowers to negotiate terms of their loans and repayment directly with their chosen bank.