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Google dominates the Indian app market with 95% of smartphones using its Android platform
Alphabet Inc’s Google has been asked by India’s government and central bank to introduce stricter controls to help curb the use of illegal digital lending apps in India, according to sources.
Although Google does not fall under the purview of the Reserve Bank of India (RBI), the US tech giant has been summoned to meetings by the central bank and the Indian government several times in the past few months and asked to introduce stricter checks and balances. this can help in removing such apps, according to four sources.
Indian regulators have already asked lenders to step up controls against illegal lending apps that have become popular during the pandemic. Regulators seek to control the spread of such apps that engage in unscrupulous activities such as charging excessive interest rates and fees or collection practices that are not authorized by the central bank or violate money laundering and other government guidelines.
Google said it revised its Play Store developer program policies for financial services apps last year, including requirements for additional requirements for personal loan apps in India from September 2021.
“We have removed more than 2,000 India-focused personal loan apps from the Play Store for violating Play Policy requirements,” a Google spokesperson said, adding that such actions are taken when its policies are violated.
“We will continue to work with law enforcement and industry bodies to help resolve this issue,” the spokesman added.
While India’s central bank requires all lending apps listed on app stores to be backed by regulated entities, it’s up to Google to enforce this and monitor compliance.
Google has also been asked to look at limiting the growth of such apps through other distribution channels, such as websites and other download methods, according to another industry source directly involved.
Google is also beginning to respond to complaints received from industry bodies.
“Before, Google didn’t respond to complaints about individual apps. Now they are more proactive and look into it when a complaint is brought to them,” said one of four industry sources directly involved in the matter who was briefed on the discussions. with Google.
The government and RBI prepare a white list of approved loan applications. The central bank has also set standards to ensure that the borrower must deal directly with the bank for loans and collections, which can help deter third-party debt collection agents.
Google dominates the Indian app market with 95% of smartphones using its Android platform.
The Ministry of Electronics and Information Technology and the RBI did not immediately respond to an emailed request for comment.
New advertising policies
India’s digital lending market has grown rapidly, facilitating $2.2 billion in digital loans by 2021-22. It’s unclear how much of that is through apps that engage in illegal practices.
These lenders often reach out to customers through ads on platforms like Facebook and Google.
Starting next month, Google will introduce new advertising policies for financial services in India, according to a blog post on its website.
The policy says that in order to run financial services ads in India, advertisers must be verified in that country. As part of the verification, advertisers must demonstrate that they are licensed by the relevant financial services regulator, the blog said.