Union Minister for Finance & Corporate Affairs Nirmala Sitharaman chaired a meeting 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, held on Friday.
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. 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 time frame 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.
The Ministry of Finance will monitor the actionable points for compliance on a regular basis.
