Even as it has removed over 2,000 loan apps from the India Play Store over various violations, Google is yet to take a hard stance against apps in this category — with multiple instances of people being defrauded of hundreds of crores having emerged — the way it has against real money fantasy gaming apps, since the company sees “real user value” in the loan apps category, a top executive said.
The company said it has removed more than 2,000 loan apps from the India Play Store since January this year for violating terms, misrepresenting information, and questionable offline behaviour.
Responding to queries posed by The Indian Express on how such loan apps manage to get on boarded to Google’s Play Store despite the verification checks — involving both automated and human interventions — employed by the company, Saikat Mitra, head of the Trust and Safety division for APAC at Google, said typically apps go through an automated technical scan and content policy review.
“In the case of loan apps, there are a series of checks that are carried out such as the rate of interest that is specified. We had a policy change recently which required loan apps to mention which underwriter they are tied to. There are certain cases when we even have a human being looking at it … but we have to understand that the problem of loan apps is what we call ‘offline bad’, which means that all the nefarious stuff is happening outside the app,” he said, adding that Google works “very closely” with law enforcement agencies to take inputs and take actions on problematic loan apps.
Saying that the loan app problem may have “peaked”, Mitra said that Google is working on an updated policy regarding loan apps which could focus on cross verification of underwriters declared by loan app developers.
Asked why Google has not taken a strict stand against loan apps, Mitra said that Google finds “real user value” in the former. “Is there real user value in this (loan apps), the answer to that is yes. Of course what happens on some loan apps is really bothersome, but then for every bad loan app, there are probably dozens if not hundreds of good loan apps, which are underwritten by an RBI-licensed bank or NBFC,” he said.
Over the last two years, there has been a significant proliferation of questionable loan apps — both on Google’s Play Store and on the internet — which rely on high-handed loan recovery, and gaining access to a person’s contact list with threats of sending defamatory messages to their contacts. Such cases have emerged across the country, with people being forced to pay back a significantly higher amount than they initially borrowed, with instances of harassment and suicides being reported.
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The menace has caught the attention of the Reserve Bank of India (RBI), local police and other authorities. As per the findings of an RBI Working Group, released in November 2021, as many as 600 out of 1,100 lending apps currently available for Indian Android users across 80 application stores are illegal apps. And as the number of lending apps grows, this trend would spike, since a user downloading a lending app cannot identify if it is legitimate or not. It is also likely that several copycat apps and websites will mushroom across the internet.
In a set of guidelines released earlier this month, the RBI sought to restrict lending companies’ access to customer data and bring more disclosure around the interest they charge.