MUMBAI: At least 10 Indian loan apps on the Google Play Store, which have been downloaded millions of times, violated Google’s rules on loan repayment lengths aimed at protecting vulnerable lenders, which according to a Reuters survey of these services and more than a dozen users.
Four apps have been taken down from the Play Store – where most Indians download phone apps – after Reuters told Google they were opposed to a ban on personal loans. an offer that required a full refund in 60 days or less.
Three of these apps – 10MinuteLoan, Ex-Money and Extra Mudra – never received calls and emails seeking feedback.
The fourth app, StuCred, was re-licensed on the Google Play store on January 7 after removing a 30-day loan offer. He has denied any wrongdoing.
There are still at least six other apps available at the store that offer loan repayment lengths, or tenancies, some as low as seven days, according to 15 lenders and screenshots of loan information from the six apps shared by Reuters.
Some of these apps charge steep processing fees, as high as 2,000 rupees (US $ 27) on loans of less than 10,000 rupees with tenancies of 30 days or less, according to the 15 lenders. Along with other costs including one-time registration costs, fishermen can pay interest rates as high as 60per per week, their loan details show.
In contrast, Indian banks usually offer personal loans with annual interest rates of 10-20per percent, and they are usually not required to be repaid in full for at least a year.
The Reserve Bank of India (RBI), the banking regulator, did not respond to a request for comment on whether it intended to implement directive measures. In December they issued a public notice on lending apps, warning some of those involved in “abusive activities”, such as raising excessive interest rates and fees. .
Google, which dominates the Indian app market with more than 98per percent of smartphones using its Android platform, said its policies have been “regularly updated in response to new and emerging threats. ’emerging and bad actors’.
“We act on apps assigned to us by users and regulatory bodies,” he said.
When contacted by Reuters, applications offering short tenancies either declined incorrectly or did not respond.
The apps, many of which act as intermediaries linking lenders and lending institutions, do not break the law as the RBI does not have rules covering minimum loan tenancies. The RBI also does not monitor intermediaries.
The Indian ministry of finance and the ministry of information technology did not respond to requests for views on whether they intended to increase scrutiny of these applications.
Some consumer activists say that short-term, or payday, loans can cause fishermen to fail and run up spinning costs.
“Loan apps with high processing fees, short tenancies and steep penalty costs are basically putting people into a debt trap,” said Pravin Kalaiselvan, who heads the digital rights group, Save Them India Foundation.
Google introduced its own global policy for its platform in 2019 “to protect users from harmful or deceptive practices”.
The rise of affordable smartphones and mobile internet in India has led to the growth of hundreds of personal loan apps in recent years. Enterprise groups say rapid advances in technology have overtaken authorities and are calling for the introduction of rules on tenancies and loan taxes.
“There are no clear rules on lending apps in India. Right now they are falling into a gray zone,” said Nikhil Pahwa, a digital rights activist and editor of MediaNama, Delhi-based publication on technology policy.
‘MADE TO INFORMATION’
The four apps found in violation of Google’s repayment policy – 10MinuteLoan, Ex-Money, StuCred and Extra Mudra – advertised 30-day loan tenancies on their apps and were downloaded. at least 1.5 million times.
Reuters took these apps to Google on December 18 and downloaded them from the Play Store in India within four days.
In response to a Reuters question as to whether it had offered loans that required full repayment in 60 days or less, StuCred said: “Google has unanimously decided that it cannot fintech apps have on their app store that have refunds under 30 days, even though there is no law it has been passed that the only thing that requires such action on their part (Google). “
Several other apps say on their Play Store listings that the minimum payback period they offer is over three months, but in reality their tenancies are often between seven and 15 days, according to the 15 lenders and their screenshots.
These apps include CashBean, Moneed, iCredit, CashKey, RupeeFly and RupeePlus, which have been downloaded nearly 12 million times in total.
Moneed said he was adhering to RBI rules and that any company that did not do so should not be allowed to do business. In response to a Reuters question as to whether he had offered loans that required full repayment in 60 days or less, he said: “We support repayment 90 days for loan cycle. “
CashBean also said it would follow RBI guidelines. “Our messenger care lines are always open to our lenders,” he said, but did not directly address the question of whether he was offering loan tenancies of 60 days or less.
Emails seeking comment did not respond to CashKey, iCredit, RupeeFly and RupeePlus and were not accessible by phone.
HARASSMENT INVESTIGATION
The lending app industry has drawn a separate police investigation that says it is investigating dozens of apps after the suicide of at least two lenders in the last month after themselves and their families being harassed by representatives of debt recovery.
Police did not reveal the identities of those under investigation.
Debt harassment is prohibited under RBI rules which state that collection agents cannot harass borrowers by “regularly harassing them”, or by contacting the family or their knowledge.
A Reuters review of 50 popular loan apps available on Google Play found that almost all of them ask borrowers to allow them to access their phone contacts.
Mahesh Dommati, a 28-year-old technical worker in Hyderabad who lost his job during the COVID-19 lockout, was unable to pay the 6,000 rupee loan he took out of an app called Slice on back. He said rehab agents used his contact list to call his family and friends again, asking them to pay on his behalf.
Slice said he adhered to RBI rules and was not involved in harassment.
(Narrated by Nupur Anand; additional narration by Jatindra Dash and Sudarshan Varadhan; Editing by Euan Rocha and Pravin Char)