Google blocked over 2,000 instant loan apps from the Play Store in the first half of 2022

Google banned over 2,000 apps that offer instant loan services to customers between January and June this year because those apps violate the company’s Play Store policies. At a roundtable on Thursday, Saikat Mitra, senior director and head of trust and safety at Google Asia-Pacific, said the bans enforced by the company were imposed after a combination of policy violations, user reports and collaboration with various law enforcement and political bodies.

“The prohibitions we enforce include evaluating data we collect ourselves — as well as data we collect from offline third-party sources,” Mitra said. That information, he added, could include details such as harassment of customers during phone calls from these instant loan service providers.

The banned apps include services specifically targeting the Indian market itself. However, there was no particular focus on cracking down on apps with ties to China.

“Regarding the policies we are enforcing on Play Store for instant loan apps, the policy requirements are in line with Indian regulations. We don’t enforce our own regulations in this sector,” Mitra said.

Google’s update on the matter comes after numerous complaints about instant loan apps using fraudulent practices spammed Indian users. After an increasing number of consumer complaints about instant loan apps surfaced on mobile app stores, the Reserve Bank of India (RBI) took note of the matter and issued a recommendation against the use of unauthorized instant loan apps in December 2020.

On Aug. 11, the RBI issued a new set of guidelines that digital lending companies should follow — including disclosure of all hidden costs, no third-party involvement in bank transfers of installment receipts or payouts to user accounts, and so on.

Unregulated instant loan services typically catered to people from low-income groups without a clear understanding of the lending process who were looking for quick access to funds. While these instant loan apps offered small-ticket loans somewhere in between 2,000 and 10,000, they charged interest rates of up to 50% per year and similar late payment fees.

Additionally, such apps would gain access to a customer’s entire contact list. Failure to repay these loans would result in these companies not only charging those exorbitant interest rates and penalties mentioned above, but also contacting the family and peers of their defaulting customers and subsequently harassing them with offensive messages.

Following complaints from users, the Enforcement Directorate (ED), a law enforcement agency under the union government’s Treasury Department, has begun cracking down on these apps as well. Earlier this month, on August 4th, the ED announced that it had frozen and garnished the entire value of the financial assets 264 crore – owned by companies operating instant loan services in India. Such services were also understood to have had ties to China and operated under the guise of partnerships with non-bank financial corporations (NBFCs) in the country.

The ED is also investigating India’s cryptocurrency exchanges for facilitating a route for these services to launder money off Indian shores.

For its part, Google banned 30 instant loan apps from its Play Store, the app market for Android devices, in India last January. Google’s removal came a month after the first RBI recommendation against digital lending services. Since then, numerous state and national government agencies have filed notices calling on Google to ban digital lending services from its Indian app store.

The latest of these incidents occurred on June 6, when Maharashtra Cyber, the state’s government-affiliated cybersecurity agency, asked Google to ban 69 instant loan apps amid reports of consumer harassment and non-compliance with Indian laws. It’s not clear if Google enforced the bans — or if the latter was responsible for some of the 2,000 or so instant loan apps the company is said to have banned in India.

Get all technology news and updates on Live Mint. Download the Mint News app for daily market updates and live economic news.

More less

Subscribe to something Mint newsletter

* Enter a valid email address

* Thank you for subscribing to our newsletter.

Comments are closed.