Personal loan apps have captured the market in the last few years. Ease of use and easy approval process have made them popular but now concerns are being expressed about such simplicity in a complex matter like applying for a loan.
Google had taken note of such issues and wanted personal loan apps in India to submit additional proof of eligibility requirements and set a time limit for these apps to comply with the new rules. Google highlighted through a blogpost, “If you are licensed by RBI to provide personal loans, you will need to submit a copy of our license.”
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The said eligibility is determined when the company provides a copy of their license by the Reserve Bank of India (RBI). The second, and more important criterion is with respect to a declaration that the app is not directly involved in money lending activities and provides only a platform for the convenience of lending money to the consumers.
“If you are not directly involved in money lending activities and are providing a platform to facilitate lending of funds to users by registered Non-Banking Financial Companies (NBFCs) or banks only, you must specify exactly what it is in the declaration. will need to be reflected from,” it added.
Google also wants better transparency from entities, including mentioning the names of all registered NBFCs and banks. It also seeks better clarity on the creator/owner of the loan apps, so that it matches the name of the respective registered business name provided through the declaration provided by the firm.
Google wants to make these rules mandatory in India as well as in countries like Indonesia and the Philippines.
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Over the past year, several reports have talked about the troubles caused by the growth of small private apps in the country. People sign up for the facility but are treated with disdain for non-payment, which has reportedly put many people on the verge of ending their lives.
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These changes from Google can give companies more accountability and also deter them for any misconduct.
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