Loan app
MeitY asks app stores to filter out unregulated digital lenders
New Delhi/IBNS: The Ministry of Electronics & Information Technology (MeitY) has shared a list of Digital Lending Apps (DLAs) being used by Regulated Entities (REs) with the app stores, requesting them to not feature lending apps other than those mentioned in the list, the finance ministry said in the Parliament on February 7.
The list has been forwarded by the Reserve Bank of India (RBI) to the ministry seeking measures to prevent loan apps run by unregulated entities from making their way to the app stores, it added.
This comes a day after MeitY banned more than 50 loan and betting applications with alleged Chinese links and informed Parliament that Google was reviewing the government order to implement on its app store.
RBI has issued a master circular on Know Your Customer (KYC) norms / Anti-Money Laundering (AML) standards/Combating Financing of Terrorism (CFT)/Obligation of banks and financial institutions under the Prevention of Money Laundering Act (PMLA), 2002, advising banks and financial institutions to follow certain customer identification procedure for opening of accounts and monitoring of transactions of suspicious nature to avoid its misuse for money laundering and reporting the same to the appropriate authority, the ministry stated.
Further, the apex bank has issued digital lending guidelines dated September 2022, which advises measures, including due diligence of Loan Service Providers (LSPs), direct disbursal of loan from bank account of a lender to the bank account of the borrower without any pass-through/pool or third-party account to avoid layering, publishing of the list of DLAs, LSPs engaged by REs and details of activities to avoid anonymity.
The Directorate of Enforcement (ED) has been entrusted to curb money laundering under the provisions of the PML Act, 2002.
ED has initiated an investigation under PMLA in several cases where the proceeds of crime have been generated and acquired by accused persons/entities through illegal loan apps, the ministry stated.
In these cases, proceeds of crime of Rs 2,116 crore (approx) have been identified, out of which proceeds of crime amounting to Rs. 859.15 crore have been attached/seized/frozen under the provisions of PMLA.
Further, assets amounting to Rs 289.28 crores have been seized under section 37A of the Foreign Exchange Management Act, 1999.
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