RBI to issue whitelist as govt cracks down on all illegal loan Apps

RBI will prepare a “Whitelist” of all the legal loan Apps and MeitY will ensure that only these “Whitelist” Apps are hosted on App Stores. RBI will monitor the ‘mule/rented’ accounts that may be used for money laundering and to review/cancel dormant NBFCs to avoid their misuse.This decision was taken at a meeting related to “Illegal Loan Apps” outside the regular banking channels in New Delhi on Thursday. Finace minister Nirmala Sitharaman chaired the meeting. The Minister expressed concern on increasing instances of Illegal Loan Apps offering loans/micro credits, especially to vulnerable & low-income group people at exorbitantly high interest rates and processing/hidden charges, and predatory recovery practices involving blackmailing, criminal intimidation etc.Ms 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.

It was also decidwd that 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. MCA will identify shell companies and de-register them to prevent their misuse,the statement said and added that  all ministries/agencies to take all possible actions to prevent operations of such Illegal Loan Apps. The meeting was attended by the Finance Secretary, Ministry of Finance; Secretary, Economic Affairs; Secretary, Revenue, & Corporate Affairs (Addl. Charge); Secretary, Financial Services; Secretary, Electronics & Information technology; Deputy Governor, RBI; and Executive Director, RBI.