The Narendra Modi government on Wednesday asked all social media and other online platforms not to advertise fraudulent loan apps. Union Minister Rajeev Chandrasekhar has said that the IT Ministry cannot place advertisements on online platforms for fraudulent and illegal loan apps that are found to be misleading and exploiting people on the internet. He said he had made it clear.
“One of the areas we are currently cracking down on is the advertising of fraudulent loan apps which takes place on many platforms and through yesterday’s advisory we have made it clear that any intermediary should be encouraged to use fraudulent loan apps as they are misleading and exploitative. We have made it clear that people using the internet cannot post advertisements for loan apps,” Chandrasekhar was quoted as saying by PTI. Also read: How can you avoid falling into the trap of instant loan apps? 6 tips
Concerns are growing over the large number of loan and gambling apps that have boomed during the Covid-19 pandemic. Several people who were struggling with their finances turned to these apps in search of quick loans. Also read: Caught in a deadly lending trap: How a dubious lending app caused 60 deaths
However, reports have surfaced that some loan apps are lending money to desperate borrowers at high interest rates and resorting to harassment and extortion to recover the money.
On Tuesday, the IT Ministry issued an advisory directing platforms to take additional steps to ensure they do not allow advertisements of illegal loan and betting apps that may be fraudulent or misleading to users. “The consequences are solely the responsibility of the intermediary” and the platform. ”
It also called for strong grievance redress mechanisms to be adopted by intermediaries. The advisory was issued two months after the ministry and the Reserve Bank of India held a meeting to discuss necessary measures against such illegal gambling and loan apps. During its October meeting, the ministry had recommended that the RBI devise a more comprehensive Know Your Customer (KYC) process for banks.
“Google removes 2,500 fraudulent loan apps from Play Store”
The ministry’s warning to online platforms comes at the same time the center reported to Congress that Google suspended or removed more than 2,500 fraudulent loan apps from the Play Store between April 2021 and July 2022. It was conducted.
Union Finance Minister Nirmala Sitharaman said in a written reply to Parliament that the government is constantly working with the central bank and other regulators to control fraudulent lending apps. The minister said the RBI has also shared a “white list” of legal apps with the government. The IT Ministry had shared this list with Google. Search engine giant Play Store has become a major distributor of digital loan apps.(With PTI input)