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Despite Policy Violations, A Host Of Lending Apps Thriving On Google Play In India

Despite Policy Violations, A Host Of Lending Apps Thriving On Google Play In India
Google Play Store’s rules on loan repayment lengths aimed at protecting vulnerable borrowers have been violated by at least 10 Indian lending apps on the Store. These apps have been downloaded millions of times, claimed a Reuters report based on analysis of such services and more than a dozen users.
Following an alter to Google from Reuters about such apps apparently violating the search engine giant’s ban on offering personal loans requiring full repayment in 60 days or less, four of the identified apps were taken down from the Play Store.
A vast majority of Indian users download apps from Google Play Store.
There were three apps 10MinuteLoan, Ex-Money and Extra Mudra, which did not comment, claimed the Reuters report.
Google Play Store allowed the fourth app, StuCred, again after it deleted the a 30-day loan offer. The fourth app denied being engage in unlawful business practices.
According to 15 borrowers and screenshots of loan details from all six apps that were shared with Reuters there were at least six other apps that were still available at the store with the apps offering short loan repayment tenures – some as low as seven days, which were clearly in violation of Google’s policies.
Very high processing fees – even as high as 2,000 rupees ($27) for processing loans of even less than 10,000 rupees and with tenures of less than 30 days, are charged by some of these apps, the report claimed based on information from borrowers. According to the loan details of the borrowers, interest rates as high as 60 per week per week is effectively charged from borrowers when other charges including one-off registration costs are taken into account.
In contrast, personal loans at annual interest rates of 10-20 per cent are typically offered by Indian banks and such loans generally do not have to be paid in full until at least for a year.
There were no comments in the report from the Indian banking regulator - the Reserve Bank of India (RBI). A public notice was issued by the RBI in December that essentially warned those lending apps engaged in “unscrupulous activities” such as charging excessive interest rates and fees from borrowers.
Google’s policies were “continuously updated in response to new and emerging threats and bad actors”, said the company which is a very dominant force in the Indian market as more than 98 per cent of smartphones in India uses its Android platform, said its policies were “continuously updated in response to new and emerging threats and bad actors”.
“We take action on apps that are flagged to us by users and regulatory bodies,” it added.
There were no comments on the issue by the apps offering short tenures for loans.
But since the RBI has no rules covering minimum loan tenures, therefore no rules in India are being broken by these apps even though many of these apps are simply intermediaries and connect borrowers to lending firms and such intermediary firms are not under the ambit of the RBI. 
“Predatory loan apps with high processing fees, short tenures and steep penalty charges on default are leading people into a debt trap,” said Pravin Kalaiselvan, who heads a digital rights group, Save Them India Foundation.
Google introduced its own global policy for its platform in 2019 “to protect users from harmful or deceitful practices”.

Christopher J. Mitchell

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