Google has a new condition for lending apps and how it can fix a big problem

Google has a new condition for lending apps and how it can fix a big problem

Loan disbursement apps and credit aggregators on the Google Play Store in India must prominently display a link to the partner bank or non-bank financial company (NBFC). The measure was introduced as an additional security measure by Google after a series of meetings the company had with officials from the Ministry of Electronics and Information Technology (MeitY) and the Reserve Bank of India (RBI) over the past few weeks.

Google updated the policy on September 5. Apps that have not complied (the deadline was September 19) will be removed from the PlayStore.

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“For applications that remain non-compliant with the requirements after the stated deadline, as is the case with any non-compliance with the policy, we have taken the necessary enforcement actions as part of our ongoing compliance scans to policy, including removing apps from the Play Store,” a Google spokesperson told ET.

The live links will allow users to verify the connection with the bank or NBFC, which in turn will highlight on their web pages a list of loan disbursement apps or credit facilitators they have approved or with. have bonded.

The government has attempted to tackle the threat of digital lending apps that defraud customers through the lure of instant credit. It has also pressured the ecosystem – including platforms such as Google, which distribute the majority of these apps – to do more to weed out fake apps. Google will continue to work with law enforcement and industry agencies to address this issue, the spokesperson added.

The Ministry of IT, in consultation with the RBI and the Ministry of Finance, is also working on comprehensive guidelines which will detail the legal requirements that loan disbursement apps and loan facilitation platforms must comply with when operating. in India, a senior ministry official said.

“Instead of asking them (Google or Apple) to allow or disallow certain apps, our approach is to develop a comprehensive framework that will include measures under which these (lending) apps can operate,” the official said. “Any other apps that do not comply with these can then be removed. We are in discussions with the RBI on the matter.

The IT Department has also asked Google to make its lending app listing rules “watertight”, another official said.

On September 9, the Ministry of Finance said it had asked the RBI to prepare a whitelist of loan applications that would be allowed to operate in India. The ministry said the IT ministry would be asked to ensure that only these apps are allowed to run in India.

Google India introduced a new Play Store policy in May that required such apps to prominently display the institution that underwrote the loans, the interest rate and other details. The September 5 update requires them to add a link to banks and NBFCs in addition to asking institutions to list the apps on their websites.

According to Google policy, all apps that directly offer loans, generate leads for banks and NBFCs, or connect customers with third-party lenders must mention details such as minimum and maximum repayment term, interest and other costs in the metadata. This should also include “representative examples” of the total cost, including principal and applicable fees, as well as a privacy policy that discloses the access, collection, use, and sharing of customers’ personal and sensitive data. users.

Lending applications in India must also submit a copy of their RBI license to Google India if they have one.

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In August, Saikat Mitra, senior director and head of trust and safety at Google in the Asia-Pacific region, told reporters that the company removed up to 2,000 credit disbursement apps between January and June for violating PlayStore policies, RBI money lending rules, law enforcement submissions, and user feedback.

Mitra said then that stricter rules, which would make the relationship between these credit disbursement applications and the banking partner more explicit, were in sight.


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