Home Uncategorized Indian Loan Apps on Google Play Store Charging High Interest on Short-Term Loans in Policy Violation

Indian Loan Apps on Google Play Store Charging High Interest on Short-Term Loans in Policy Violation

Indian Loan Apps on Google Play Store Charging High Interest on Short-Term Loans in Policy Violation

At least 10 Indians Lending Applications More than a dozen users of Reuters’ review of such services have reported that Google violated the terms of the loan repayment target, which aims to protect vulnerable borrowers on Google’s Play Store, which has been downloaded millions of times.

Four Applications Removed from Play Store – Most Indians here download the phone Applications – After Reuters flagged Google that it was violating the ban on making personal loans that are fully repayable within 60 days or less.

Three of these Applications – 10 Minute, X-Money and Extra Stamp – Calls and emails requesting comment are not returned.

The fourth application, Stockred, is allowed back Google Play Store on January 7 after removing the 30-day loan offer. It denies participation in any unintentional practices.

At least six Applications Available at a store that offers less than seven days of loan repayment length or tenure, according to screenshots of loan details from 15 borrowers and a total of six Applications Shared with Reuters.

Some of these Applications Apply steep processing fees. On loans below Rs 2,000. 10,000 in 30 days or less, according to 15 borrowers. In addition to other charges, including one-off registration costs, borrowers can, in fact, pay 60 percent interest rates per week, showing their loan details.

In comparison, Indian banks usually offer personal loans with an interest rate of 10-20 per cent per annum and are generally not required to repay in full for at least one year.

The Reserve Bank of India (RBI), the banking regulator, did not respond to a request for comment on whether it planned to increase monitoring activity. It issued a public notice in December Lending Applications, Warns some who engage in “naive activities” such as charging high interest rates and fees.

Google dominates the Indian app market with 98% of smartphones Android The platform said its policies are “constantly updated in response to new and emerging threats and bad actors”.

“We will take action Applications They are flagged to us by consumers and regulatory bodies. “

When contacted by Reuters, The Applications Giving a short tenure does not mean rejecting or reacting to a mistake.

The Applications, Most of which act as intermediaries connecting the borrowers and Lending Companies do not violate the law as the RBI does not have rules regarding minimum loan tenure. The RBI also does not oversee intermediaries.

The Indian Ministry of Finance and the Ministry of Information Technology did not respond to requests for comment on whether they planned to increase their scrutiny. Applications.

Some consumer campaigners say short-term, or pay-as-you-go loans can lead borrowers to default and increase spiraling costs.

“Predatory loan Applications With high processing fees, short-term and default penalty charges are putting people in a debt trap, ”said Praveen Kalaiselvan, who heads the Save Them India Foundation, a digital rights group.

Google introduced its own global policy for its platform in 2019 to “protect consumers from malicious or fraudulent practices”.

The growth of smartphones and affordable mobile internet in India has seen hundreds of personal expansion Lending Applications For the past few years. Campaign groups say the rapid development of technology has outweighed executives, calling for the introduction of regulations regarding debt tenure and fees.

“There are no clear rules Lending Applications In India. Now they are going gray, ”said Nikhil Pahwa, a Delhi-based publication on digital policy and editor of Medianama, a digital rights activist.

‘Decided unilaterally’

Four Applications Violated Google’s repayment length policy – 10 Minute, X-Money, Stockred and Extra – 30 days Advertising Loan Term Applications And downloaded a total of 1.5 million times.

Reuters flagged them off Applications Sent to Google on December 18 and removed from Play Store in India within four days.

Responding to a Reuters question on whether the loan was fully repaid in 60 days or less, Stockrad said: “Google unilaterally decided on that fintech. Applications Should not be on them Applications The store, which pays back within 30 days, requires such action on their part (Google), although no legislation has been approved for them. “

Many other Applications Let’s say the minimum repayment length they offer on their Play Store lists is over three months, but in reality their tenure is often between 15 and seven and 15 days according to the borrowers and their screenshots.

That’s it Applications There are Cashbean, Monid, Icredit, CashKay, RuPayfly and RuPayPlus, which have been downloaded a total of 12 million times.

Monid said it was in compliance with RBI regulations and any company that did not do so should not be allowed to do business. In response to a Reuters question about whether the loans were fully repaid in 60 days or less, it said: “We support 90-day repayments for the loan cycle.”

Cashbean also said it had followed RBI guidelines. “Our customer-care lines are always open to all of our borrowers,” it said. It does not directly address the question of whether it gives a loan term of 60 days or less.

CashKay, Icredit, RuPayFly and RuPayPlus did not respond to emails requesting comment and could not be reached by phone.

Harassment investigations

The Lending The app industry has drawn attention to the police scrutiny that says dozens are being investigated Applications Following the suicides of at least two borrowers over the past month, they and their families have been harassed by debt-recovery agents.

Police did not disclose the identities of those under investigation.

Debt-recovery harassment is prohibited under RBI regulations, which state that collection agents cannot harass borrowers by “constantly harassing” or contacting their family or acquaintances.

50 Popular Reuters Review Lending Applications Available on Google Play, almost everyone has found that borrowers need to be allowed to access their phone contacts.

Mahesh Domati, a 28-year-old tech worker in Hyderabad, lost his job at the time COVID-19 Lockdown, Rs. 6,000 loan he took from an app called Slice. He said recovery agents used his contact list to repeatedly call his family and friends, demanding that he pay on his behalf.

Slice said it was in compliance with RBI regulations and did not commit harassment.

© Thomson Reuters 2020

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(Except for the headline, this story was not edited by NDTV staff and published from a press release)

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