Finance Minister provides tips: The Finance Minister of India Nirmala Sitharaman in light of the rise in instances of digital fraud, has agreed to take a number of steps to regulate the operation of illicit lending apps after discussing a number of related concerns in a meeting. The majority of digital lending apps run independently and without central bank registration.
Finance Minister provides tips: Key Points
- The harassment by a handful of the owners of digital lending applications, there have been a rising number of cases of reported suicides of borrowers.
- The minister-chaired meeting came to the decision that RBI would create a whitelist of all the authorised apps and the Ministry of Electronics and Information Technology (MeitY) would make sure that only these were made available on app stores.
- The finance minister said that the central bank will also make sure that registration of payment aggregators is completed within a deadline and that no unregistered payment aggregator will be permitted to operate after that.
- The Ministry of Corporate Affairs (MCA) will identify shell businesses and de-register them as part of measures to stop the spread of such apps in order to stop misuse.
- Additionally, steps should be taken to raise customer, bank employee, law enforcement agency, and other stakeholders’ cyber knowledge of these apps.
- Each ministry or agency has been instructed to take every precaution to stop the use of these apps.
Finance Minister provides tips: What were the Issues listed?
- In order to prevent their abuse, the RBI will keep an eye on “mule/rented” accounts that could be used for money laundering and review/cancel dormant NBFCs.
- The finance minister voiced concerns during the meeting about the rise in illegal loan apps that offer loans and microcredits, particularly to vulnerable and low-income groups of people, at exorbitantly high interest rates and processing/hidden charges, as well as predatory recovery practises like blackmailing and criminal intimidation.
- Sitharaman also raised the prospect of money laundering, tax evasion, data breach/privacy, and the abuse of unregulated payment aggregators, shell firms, defunct NBFCs, etc. for carrying out such deeds.
Finance Minister provides tips: Attendees:
- Secretaries of Finance, Economic Affairs, Revenue, and MeitY
- Deputy Governor of RBI
- Executive Director of the RBI
- Secretary of Corporate Affairs
- Secretary of Financial Services