87 Illegal Lending Apps Blocked So Far: Govt

Minister of state (MoS) for corporate affairs Harsh Malhotra yesterday said that the IT ministry (MeitY) has so far blocked access to 87 illegal lending apps. 

In a written reply in the Lok Sabha, Malhotra said that action was taken under section 69A of the Information Technology Act, 2000. 

“… So far, after following the due process, MeitYhas blocked a total of 87 illegal loan lending applications under section 69A of the Information Technology Act 2000,” said Malhotra. 

Responding to a question from Samajwadi Party member of Parliament (MP) Lalji Verma, the MoS further added that inquiries, inspections and investigations are carried out “from time to time” under the Companies Act against firms involved in online lending. He further asserted that appropriate legal action is taken when violations are found against such companies. 

However, the government did not divulge further details on ongoing probes.

This comes close on the heels of the corporate ministry last year launching probes into 665 illegal Chinese lending apps after receiving complaints from the Reserve Bank of India (RBI) and the MeitY. Some of these cases were also sent to the Serious Fraud Investigation Office. 

At the time, it was reported the ministry was examining the possibility of cancelling registrations and freezing accounts of fraudulent operators.

The crackdown was part of the Centre’s broader bid to curb the operation of illegal Chinese loan apps in the country. In many instances, unauthorised lending apps, helmed by Chinese nationals, were allegedly forging KYC documents of unsuspecting Indian nationals and using it to appoint these Indians as dummy directors of firms. 

A big chunk of these illegal lending apps were allegedly involved in mis-selling, breach of data privacy, charging of exorbitant interest rates, unfair business conduct, and unethical recovery practices. This came to light after many reportedly died by suicide, while some faced allegations of sexual harassment.

Following this, the RBI, in 2022, came out with guidelines for digital lending last year, saying that certain concerns, which, if not mitigated, “may erode the confidence” of people in the digital lending ecosystem. 

The aftermath saw the Centre blocking access to multiple illegal lending apps and directing digital platforms not to carry advertisements of fraudulent loan apps. 

As part of its broader clamp down on cyber frauds, the telecom department (DoT) yesterday directed all major smartphone makers to preload the Sanchar Saathi app on all new devices sold in India to enable blocking of stolen devices, tracking lost phones and spotting fake IMEI numbers.

Separately, DoT also ordered messaging platforms to enforce mandatory SIM binding, which will ensure users can only access services on the device, with the SIM used during registration.​ Platforms now have 90 days to implement these changes.

The directions are part of a broader government strategy to tackle the sharp rise in cyber incidents, which saw Indians losing INR 22,845.73 Cr to cyber frauds in 2024 alone.

The post 87 Illegal Lending Apps Blocked So Far: Govt appeared first on Inc42 Media.