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      RBI to Prepare ‘Whitelist’ of Approved Instant Finance Apps Amid Proliferation of Illegal Loan Apps | Details Inside

      Law enforcement agencies of India have tracking and tracking risky loan apps that have operating in the country unlawfully. Finance Minister Nirmala Sitharaman has taken notice of these fraudulent instant loan apps and has direct the Reserve Bank of India (RBI) to prepare a ‘whitelist’ of instant finance apps, that are genuinely clear to operate in the nation.

      Many low-income Indians have, off late, found themselves being trap by predatory loan apps and have end up getting expose to dangerous financial and physical risks.

      When the whitelist is prepare, India’s Ministry of Electronics and Information Technology (MeitY) will ensure that only the apps with RBI clearance will feature on application stores.

      Government said in a press release :

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

      The decision comes a day after Nirmala Sitharaman chair a meeting with RBI and finance ministry officials to discuss various issues related to ‘illegal loan apps’ that have operating in the country under the nose of the regular banking channels.

      Nirmala Sitharaman also express concerns regarding the predatory recovery practices that these illegal loan apps have been resorting to.

      These include blackmailing and criminal intimidation.

      Government said in a press release :

      “Nirmala 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,”.

      Last week, India’s financial watchdog, the Enforcement Directorate (ED) raided six online payment gateway locations in Bengaluru due to alleged irregularities in mobile app-based loans that were ‘manage’ by Chinese individuals.

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      The police also seize Rs. 17 crore from the raided firms that included Razorpay, Paytm, and Cashfree among many others.

      Nirmala Sitharaman’s decision to have the RBI make a whitelist of finance apps has seemingly trigger by these raids.

      On 9th September 2022, Andhra Pradesh Chief Minister YS Jagan Mohan Reddy ask state officials to take action against online money-lending apps after a couple from Rajahmundry in the East Godavari district died by suicide earlier this week due to harassment by the agents of a loan app.

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