FM tells banking industry and RBI: Unauthorized lending applications need tougher action

The Reserve Bank of India (RBI) and other authorities overseeing the financial industry have been asked by Finance Minister Nirmala Sitharaman to take more action to stop the spread of unauthorized internet lending. In view of the present domestic and global macro-financial circumstances, Sitharaman urged regulators to be watchful and proactive in detecting possible threats to financial stability during the 28th Financial Stability and Development Council (FSDC) meeting.

The discussion included strategies to stop the negative consequences of illegal lending via online applications as well as steps to stop them from spreading further.
According to an official statement issued after the meeting, the FSDC discussed macro-financial stability challenges and India’s preparedness to address them.
In order to help GIFT IFSC achieve its strategic aim of ranking among the top international financial centers globally and carrying out its intended function of enabling foreign capital and financial services for the local economy, the council also discussed current inter-regulatory issues.
The FSDC spoke about several approaches to putting Union Budget announcements and FSDC decisions into practice. Standardizing KYC standards, facilitating the financial sector’s ability to use KYC records interchangeably, streamlining and digitizing the KYC procedure, launching social enterprise fundraising via social stock exchanges, and taking action to stop the negative impacts of unapproved online lending and stop it from spreading further were some of these.
Over 2,500 scam applications were deleted by Google.
The government notified Parliament in December that between April 2021 and July 2022, Google had either banned or deleted more than 2,500 bogus lending applications from its Play Store.
The objective is to reduce any vulnerabilities in the Indian financial system by being proactive, maintaining cybersecurity preparedness, being continuously attentive, and acting appropriately and promptly.
Numerous gullible customers have been deceived by fraudulent loan applications, leading to hardship on many an occasion.
In order for the financial sector to continue growing and providing the financial resources required for equitable economic development, the members of the FSDC have decided to improve inter-regulatory cooperation.
The RBI Governor Shaktikanta Das chaired the FSDC Sub-Committee, and the FSDC recognized the members’ activities on earlier FSDC rulings as well as their efforts.