Union Minister of State for Electronics and IT Rajeev Chandrasekhar on Wednesday acted on the directive of the Ministry of Electronics and Information Technology (MEITY) to media platforms social and other online platforms published Tuesday and asked them to ensure that they do not host advertisements from fraudulent loan apps. The Union Minister said the IT Ministry has made it clear to platforms that they cannot run advertisements regarding fraudulent and illegal loan apps as they mislead and exploit people who use Internet.
On the sidelines of an event, the Minister of State for Electronics and IT told PTI, « One of the areas that we are cracking down on right now is the advertising of fraudulent loan apps that many platforms are offering and we did, thanks to yesterday’s notice. It is clear that no intermediary can distribute advertisements regarding fraudulent loan applications, as they would be misleading and exploit people who use the Internet.
The mushrooming illegal instant loan apps – which lend small sums to desperate borrowers at exorbitant interest rates and often resort to harassment or even blackmail later – are thriving and are openly advertised on online platforms. line.
In the advisory issued on Tuesday, the IT Ministry has directed that « intermediaries and platforms shall take additional measures to prohibit any advertisement of illegal lending and betting apps that may scam and mislead users into error, the consequences of which will be the sole responsibility. intermediaries and platforms”.
The notice also highlights the importance of robust grievance mechanisms employed by intermediaries.
In a meeting held in October 2023, the IT Ministry and the Reserve Bank of India (RBI) discussed the necessary actions against illegal betting apps.
During the meeting, the ministry urged the RBI to design a more comprehensive Know Your Customer (KYC) process for banks. This proposed KYC process, called “Know Your Digital Finance Application” (KYDFA), aims to improve the ability to effectively trace and address malicious lending applications.
This recommendation was formally communicated to the Department of Financial Services (DFS) and the RBI on October 13, 2023. Chandrasekhar had then said, “We have recommended to the RBI, within its regulatory framework, to design detailed KYC for businesses, to which we refer. under the name Know Your Digital Finance App (KYDFA), in the same way that customers must undergo detailed KYC to open a bank account. This, he had said, « will ensure that only legitimate and controlled financial applications can access and use the Indian banking system and further, in the event of any violation of the law, the KYDFA process will help establish traceability and origin of application for action”. under the law. »
Earlier this month, the government informed Parliament that Google had suspended or removed more than 2,500 fraudulent lending apps from its Play Store between April 2021 and July 2022.
The government is constantly in touch with the RBI and other relevant regulators and stakeholders to check fraudulent loan applications, Finance Minister Nirmala Sitharaman said in a written reply to the Lok Sabha this month.
As part of measures taken to control fraudulent loan applications, she said, the RBI shared a « white list » of legal applications with the Indian government, and this list was shared by the Ministry of Finance. ‘Electronics and Information Technology (Meity) with Google, whose App Store is the main source of distribution of digital lending applications.
Between April 2021 and July 2022, Google also reviewed approximately 3,500 to 4,000 loan apps and suspended or removed more than 2,500 fraudulent loan apps from its Play Store.
Tuesday’s notice also highlighted the importance of robust grievance mechanisms employed by intermediaries. It said: « Rule 2(1)(j) defines ‘grievance’ to include ‘any complaint, whether regarding content, an intermediary’s or publisher’s obligations under the law, or other questions relating to the IT resources of an intermediary or publisher”. publisher, as the case may be.” Any complaints made to the intermediary/platform, whether via the reporting function in the app or to the Grievance Officer’s email address/contact details, are included in the complaint definition and must be addressed as such through intermediaries/platforms. Thus, intermediaries/platforms must enable users, victims or anyone acting on their behalf, as the case may be, to also report violations relating to Rule 3(1)(b) or Rule 3(2) (b) in a simple and easily accessible manner, including through in-app user reports on its platform.
(With contributions from the agency)
