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Google Takes Down Around 200 Lending Apps In India Clean-Up: BQ Exclusive

Google has taken down apps based on complaints from local law enforcement along with inputs from the RBI, state governments.

The Google logo is displayed on a wall at the Google Playspace at CES 2020 in Las Vegas, Nevada, U.S (Photographer: David Paul Morris/Bloomberg)
The Google logo is displayed on a wall at the Google Playspace at CES 2020 in Las Vegas, Nevada, U.S (Photographer: David Paul Morris/Bloomberg)

Google Inc.’s efforts to crack down on errant digital lending apps targeting Indian consumers have led to at least 200-250 loan providers being removed from the Play store, five people in the know confirmed.

According to the people quoted above, the applications were shortlisted through complaints received from various police departments across the country. Suggestions also came in from authorities such as the Reserve Bank of India and state government officials. Additionally, Google relied on its own developer guidelines to find applications which are in violation of rules before taking them down from the Play store.

While there are no official estimates on the number of apps which were flagged off and eventually taken down, people in the know say that developers of at least 500-600 mobile loan apps have received mails from the tech giant over the last few weeks to verify their credentials, before being allowed to resume their activities on the Play store.

The email, a copy of which has been reviewed by BloombergQuint, asks the app developers to verify their credentials as either a registered NBFC with the RBI, an entity acting as a legal representative of a lending firm or an entity with state government approval to act as a lender.

If the developers are unable to provide these details within five working days, then Google would remove the application from its Play store, the email read.

Emails sent to Google and the RBI were not immediately answered.

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Google has also sent communication to developers in cases where data permissions sought from the customer exceeded the mandate of the application. In such instances, Google has asked the developers to demonstrate whether the additional data points collected by them would help better serve the customer. Google has sought responses for review by March 29, 2021.

If the developers are unable to show due cause for collecting these data points from customers during the review, their app will be taken down, the communication said. BloombergQuint has reviewed a copy of this communication sent to an NBFC.

The action by Google follows multiple representations made by the RBI, the police departments and even industry representatives from the digital lending industry.

According to the first of the five people quoted above, as part of its representations to Google, the RBI had highlighted instances of loan applications which were clearly in violation of the central bank’s norms on lending.

These apps were either charging annualised rates as high as 100-365% for short-term loans, or were gathering excessive private information of a user as part of their process. The regulator has provided Google with a clear set of rules used to judge usurious lending activity.

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Srikanth Lakshmanan, an independent researcher working with the Cashless Consumer group, claims to have shortlisted about 1,050 mobile apps on Google Play store after looking at the kind of tools they use in the development process. Of these, about 450 mobile apps have gone off the Play store in the last one month, he said.

“It is possible that some of them would have been removed by Google directly, while in other cases, the developers would have pulled down the application due to the negative exposure from various authorities recently,” Lakshmanan said.

According to him, a number of these lending apps use similar white label services, after putting their branding on top, which allows them to offer loans with minimal manual effort.

On Thursday, Google, in a blog post, said it had been taking steps to curb unauthorised loan apps, which were resulting in unethical lending practices and borrower harassment.

“We have reviewed hundreds of personal loan apps in India, based on flags submitted by users and government agencies. The apps that were found to violate our user safety policies were immediately removed from the Store, and we have asked the developers of the remaining identified apps to demonstrate that they comply with applicable local laws and regulations,” Suzanne Frey, product, android security and privacy, wrote in the blog.

The RBI, which has warned twice against malpractices in digital lending, has now set up an internal working group to study the digital lending ecosystem. Terms of reference given to the committee include creating better regulation and protecting customers against illegal lenders. The internal working group is expected to submit its report in three months, after which the RBI will finalise any new guidelines needed.

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