After the government earlier this week disabled 94 online lending apps, the home and IT ministries, as well as the Reserve Bank of India (RBI), will hold consultations over the following several days to determine the next steps.
A day after internet service providers began shutting down the websites of online lending companies, the founders of various lending platforms met with representatives of the Ministry of Electronics & Information Technology (MeitY) in New Delhi on Tuesday.
Fintech and lending company representatives attempted to clarify the reasons why the blocking order was issued from several departments.
These intermediaries have been asked by MeitY to make sure that “only the apps figuring in the list” (those utilised by regulated organisations) are hosted on their app stores.
The RBI would create a “whitelist” of all the legal apps, and MeitY would make sure that only these were placed on app stores, according to a statement made by the finance ministry in September.
The Directorate of Enforcement (ED) has started various cases under the Prevention of Money Laundering Act (PMLA) where the proceeds of crime have been generated and obtained by accused individuals or businesses through unlawful lending applications, the finance ministry has informed the Parliament.
First, the list of apps includes those that might have ultimate or partial ownership with Chinese entities; second, lending apps that are not regulated by the RBI and which may be storing data in Chinese servers; and third, apps run by businesses against which customer complaints of recovery harassment have been made. These three broad categories were the basis for the ban.
LazyPay, the Avail Finance portal operated by Ola, Indiabulls Home Loans, Faircent, Kissht, and other applications and portals are on the list of those for which the prohibition order has been issued.
