New Delhi: Alleging that the loan offering apps are not following the safety policies, Google India on Thursday removed a number of such apps from its Play Store. The strict action from Google was taken after reports suggested that at least 10 Indian lending apps that have been downloaded millions of times on Google’s Play Store and these apps have breached Google rules on loan repayment lengths or tenures.
What RBI warned?
Issuing guidelines, the Reserve Bank of India recently advised public to beware of unauthorised digital lending platforms and mobile apps. The advisory from RBI came after three borrowers in Telangana committed suicide in the recent past following alleged harassment by personnel of such lenders.
Cautioning people against falling prey to such unscrupulous activities, the RBI said legitimate public lending activities can be undertaken by banks, non-banking financial companies (NBFCs) registered with RBI and other entities who are regulated by the State governments under statutory provisions, such as the money lending acts of the States concerned.
Why customers should be worried?
1) There are reports about individuals/small businesses falling prey to growing number of unauthorised digital lending platforms/Mobile Apps on promises of getting loans in quick and hassle-free manner.
2) These digital platforms demand excessive rates of interest and additional hidden charges. The interest rates range between 18 per cent to a whopping 50 per cent.
3) They also take up unacceptable and high-handed recovery methods and misuse of agreements to access data on the mobile phones of the borrowers. The online lenders capture user data when the app is downloaded.
4) These apps are not transparent and do not disclose the full information to customers.
What is the instant loan apps case?
A kind of racket is running in India in which instant personal loans are offered through mobile apps at high interest rates by unauthorised lenders. Of the numerous apps that are available on Google PlayStore, most do not have any tie-up with any bank or Non-Banking Financial Institution.
Through these apps, a customer can avail a loan within a few minutes after uploading personal details, three months’ bank statement, Aadhar card copy and PAN card copy on the app. Loans from as less as Rs 1,000 to Rs 50,000 can be availed for seven days.
Which are the apps?
Cash Mama, Loan Zone, Dhana Dhan Loan, Cash Up, Cash bus, Mera Loan, Hey Fish, Monkey cash, Cash Elephant, Water Elephant, QuickCash, Kissht, LoanCloud, InstaRupee Loan, Flash Rupee-Cash Loan, Mastermelon Cashtrain, GetRupee, ePay Loan, Panda iCredit, EasyLoan, RupeeClick, OCash, Cashmap, Snapit, RapidRupee, ReadyCash, Loan Bazaar, Loanbro, Cash Post, Rupeego, Cash Port, RsRush, Pro Fortune Bag, Rupee Loan, Robocash, CashTM, Udhaar Loan, Credit Free.
How customers are affected?
Apart from imposing hefty penalties for failure or delay in repayment of loan, these app agents use a combination of coercion, blackmail, and threats. After issuing loans to customers from their app for seven days, they divide all the customers into different categories of buckets. On a due date, it is called as D-0 bucket; after the due date from day 1 to day 3, it is S1 bucket; from day 4 to 10, it is S2 bucket; and from day 11 to 30, it is S3 bucket. After the due date, a customer will be harassed with dozens of calls from these agents. During S2 bucket, abusive calls will be made to family members. Later, threats and blackmail start. Finally, they access the contacts of relatives and friends of the customers and send them WhatsApp messages defaming the defaulter.