MeitY only wants apps not run by regulated firms removed: RBI Dy Governor

Says central bank merely provided ministry a list of apps operated by regulated entities, had not suggested any ban

The Reserve Bank of India (RBI) had not suggested banning any digital lending apps but had merely provided the government with a list of apps that RBI-regulated entities use for their lending activities, the central bank said on Wednesday. The clarification comes after the Ministry of Electronics and Information Technology (MeitY) began blocking scores of digital lending apps and websites.

Commenting on the development, M Rajeshwar Rao, Deputy Governor, RBI, said, “We have not suggested banning any digital lending apps. We have (only) shared with the ministry the list of apps that are used by entities regulated by RBI. The ministry, I think, has asked the play stores to remove apps that are not operated by entities regulated by RBI.”

“We asked the NBFCs to give us a list of the apps they use for lending purposes. We have given that list to the government. And, the government has taken this step based on the list that we have provided,” said RBI Governor Shaktikanta Das.

The fintech and the digital lending ecosystem has been in a state of flux following the development and most players seemed confused on why the government undertook such an exercise.

Industry Associations such as the Digital Lending Association of India (DLAI) and Fintech Association for Consumer Empowerment are said to be engaging with all stakeholders to get a grip on the issue, but they too seem clueless about what has happened.

In a statement on Tuesday, DLAI said, “As of today, we as an association have not received any formal communication from MeitY on restricting any digital lending app or any warning on any fraudulent practices. We are in the process of collating information from our members and other industry associates about the details. We will approach MeitY and other relevant authorities to understand the matter in detail and implement requisite action points if required.”

Some of the apps that have ostensibly been blocked are Indiabulls Home Loans, mPokket, Faircent, KreditBee, PayU and Kissht. While many internet service providers (ISPs) have blocked access to these websites, Google is examining a directive to restrict apps on its Play Store.

As per reports, starting on Sunday, MeitY began blocking 138 betting and 94 Chinese loan apps citing their alleged involvement in money laundering and that they posed a threat to India’s financial security.