NEW DELHI: Union Finance Minister Nirmala Sitharaman, in a meeting with secretaries and top RBI officials, has outlined multiple steps to prevent operations of illegal loan apps that work outside the regular banking channels.
The meeting, held on Thursday, was attended by Finance Secretary, Economic Affairs Secretary, Revenue and Corporate Affairs (Addl . Charge) Secretary; Financial Services Secretary; Electronics & Information Technology Secretary: RBI Deputy Governor and Executive Director of RBI.
During the meeting, the finance minister expressed concern over increasing instances of illegal loan apps offering loans/micro credits, especially to vulnerable and low-income group people at exorbitantly high interest rates and processing/hidden charges, predatory recovery practices involving blackmailing, criminal intimidation etc, according to an official statement released by the Ministry of Finance.
Sitharaman also noted the possibility of money laundering, tax evasion, breach/privacy of data, and misuse of unregulated payment aggregators, shell companies, defunct NBFCs, etc., for perpetrating such actions, the ministry said.
After detailed deliberations on legal, procedural and technical aspects of the issue, it was decided that the RBI will prepare a “Whitelist” of all the legal Apps and MeitY will ensure that only these “Whitelist” Apps are hosted on app stores; the RBI will monitor the ‘mule/rented’ accounts that may be used for money laundering and to review/cancel dormant NBFCs to avoid their misuse and RBI will ensure that registration of payment aggregators be completed within a timeframe and no un-registered payment aggregator be allowed to function after that.
During the meeting, it was also agreed that the Ministry of Corporate Affairs will identify shell companies and de-register them to prevent their misuse and steps should be taken to increase cyber awareness for customers, bank employees, law enforcement agencies and other stakeholders.
The Ministry of Finance will monitor the actionable points for compliance on a regular basis, the ministry said in the statement. (ANI)