Illegal Loan Apps fraud ; Finance Minister chairs meeting

New Delhi: Union Minister for Finance & Corporate Affairs Smt. Nirmala Sitharaman chaired a meeting yesterday to discuss the various issues related to “Illegal Loan Apps” outside the regular banking channels.

The meeting was attended by the Finance Secretary, Ministry of Finance; Secretary, Economic Affairs; Secretary, Revenue, & Corporate Affairs (Addl. Charge); Secretary, Financial Services; Secretary, Electronics & Information technology; Deputy Governor, RBI; and Executive Director, RBI.

The Finance Minister expressed concern on increasing instances of Illegal Loan Apps offering loans/micro credits, especially to vulnerable & low-income group people at exorbitantly high interest rates and processing/hidden charges, and predatory recovery practices involving blackmailing, criminal intimidation etc. Smt. Sitharaman also noted 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.

After detailed deliberations on legal, procedural & technical aspects of the issue, it was decided in the meeting that:

RBI will prepare a “Whitelist” of all the legal Apps and MeitY will ensure that only these “Whitelist” Apps are hosted on App Stores.

RBI will monitor the ‘mule/rented’ accounts that may be used for money laundering and to review/cancel dormant NBFCs to avoid their misuse.

RBI will ensure that registration of payment aggregators be completed within a timeframe and no un-registered payment aggregator be allowed to function after that.

MCA will identify shell companies and de-register them to prevent their misuse.

Steps should be taken to increase cyber awareness for customers, bank employees, law enforcement agencies and other stakeholders.

All Ministries/Agencies to take all possible actions to prevent operations of such Illegal Loan Apps. PIB