Prodded by the government, Google has unveiled tighter norms for digital lending players or those who would act as mediators between customers and lenders. The tech giant has made it mandatory for all similar apps in its Play Store to submit the lending license issued by the Reserve Bank of India to furnish details of the lending agreement if the entity in question is a third-party fintech, BusinessLine has reported.
The new rules also prevent digital lending apps from accessing the storage, contacts, location history, phone numbers and photographs of customers.
The objective of the entire exercise is to shield consumers from apps and services that could expose them to unnecessary risk and breach of data privacy.
Though the industry welcomed stricter gatekeeping, a few experts also noted that this might also push up their cost. Explaining the situation Ajay Chaurasia, vice president of RupeeRedee said that since customers cannot upload Aadhar card images, they would need to verify such KYC documents live which might raise costs.
One positive fallout of the new norms, experts hoped, will be a level playing field for digital lenders who play ethically and maintain a fair degree of transparency.
Last year Google was nudged by the government a few times to restrict apps that are not sensitive to the cause of data safety and had risky business policies. Since September last year, Google has been incrementally making modifications to its norms of digital lending.
The tech giant said that it has weeded out more than 2,000 apps that promised easy personal loans. Those checks and balances are getting tougher with Google’s new measures.
The demand for personal loans is zooming in India. In fact, personal loans have often helped banks even while demand for loans from the industry has proved to be lukewarm.
Sugandh Saxena, chief executive officer of Fintech Association for Consumer Empowerment hoped that the new rules will discourage apps that were taking access to customers to exploit their contacts and pictures. Saxena told the newspaper that their association would continue to monitor the activity of illegal and fraudulent apps as they might use some other avenue somewhere else to continue their business.
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