It is the responsibility of state authority to investigate cases of illegal practices by exploitative digital money lending apps, the Ministry Of Electronics And Information Technology (MEITY) has said.
IT Minister for State Sanjay Dhotre said that as of January 20, 2021, Google had removed 100 digital lending apps or instant loan apps on its app store after law enforcement agencies took up the matter with the tech-giant.
“The complaints are mainly related to high interest rates, alleged collection of personal data and its misuse, fraudulent and unlawful practices of physical threats and use of other coercive methods for recovery of loan. Few cases have also been filed in the courts,” he said.
The complaints against these digital money lending apps are related to high interest rates, alleged collection of personal data and its misuse, fraudulent and illegal practices of physical threats and use of other coercive methods for recovery of loan.
Some cases have also been filed in the courts, Dhotre said.
The ministry in negotiation with Google worked for prevention, detection and removal of these fraudulent apps from the Play Store.
Dhotre said that the state governments are responsible for prevention, detection, investigation and prosecution of crimes including misuse of social media through their law enforcement mechanism due to the fact that police and public order are state subjects as per the constitution.
The RBI has strict guidelines on interest rates that can be charged and practices to be followed by collection agents when trying to recover or collect loan repayments, but on the other hand these lending apps use exploitative tactics to earn huge margins and recover the loan.
Many borrowers have complained that employees of these apps and companies harassed them over the phone and even blackmailed them through social media.