Mumbai (Reuters) – At least 10 Indian lending apps on Google’s Play Store, which have been downloaded millions of times, according to a Reuters review of such services and more than a dozen, to protect unsecured borrowers Google rules on the length of loan repayments have been violated by users.
Four apps were taken down from the Play Store – where most Indian phones download the app – after Reuters flagged Google for a ban on offering personal loans requiring full repayment in 60 days or less. Were violating.
Three of these apps – 10MinuteLoan, Ex-Money and Extra Mudra – did not return calls and emails seeking comments.
The fourth app, StuCred, was allowed back to the Google Play store on January 7 after removing the offer of a 30-day loan. It denied any involvement in any dishonest behavior.
There are at least six other apps available on the store that provide loan repayment length, or tenure, as few as seven days, 15 per borrowers and screenshots of loan details shared from all six apps .
Some of these apps apply higher processing fees of up to Rs 2,000 ($ 27) for loans under 30 days or less, according to 15 borrowers. Along with other charges, including one-time registration fees, borrowers can pay in real terms, with interest rates up to 60% per week, their loan details show.
In comparison, Indian banks typically offer personal loans with annual interest rates of 10–20%, and they usually do not have to be repaid in full for at least one year.
The Reserve Bank of India (RBI), the banking regulator, did not respond to a request for comment about whether it planned to take supervisory action. In December it issued a public notice about lending apps, warning of being engaged in some “dishonest activities”, such as charging high interest rates and fees.
Google, which dominates India’s app market with more than 98% of smartphones using its Android platform, said its policies were “constantly updated in response to new and emerging threats and bad actors”.
“We take action on the apps that are flagged by us users and regulatory bodies,” he said.
When contacted by Reuters, apps offering short tenures either denied wrongdoing or gave no response.
The applications, many of which act as middlemen linking borrowers and lending institutions, are not breaking the law as RBI has no rules covering at least 10 lakh rules. The RBI also does not supervise middlemen.
The Indian Ministry of Finance and the Ministry of Information Technology did not respond to requests for comments on whether they planned to increase scrutiny of these apps.
Some consumer campaigners say that short-term, or payday, loans can lead to borrowers and running up enthusiastic costs.
“Loan apps on defaults, high processing fees on defaults, small tenures and step penalty charges are making people fall into the debt trap,” said Praveen Kaleselvan, head of the Digital Rights Group of the Saving Them India Foundation. ”
Google introduced its global policy in 2019 for its platform “to protect users from harmful or fraudulent practices”.
The rise of smartphones and affordable mobile internet in India has seen a proliferation of hundreds of personal lending apps in recent years. Campaign groups say that the rapid advance in technology has brought relief to the authorities and they are demanding implementation of rules regarding debt tenacity and fees.
“There are no clear rules on lending apps in India. Right now they come in a gray zone, ”said Nikhil Pahwa, Digital Rights Activist and Editor of MediaNama, a Delhi-based publication on technology policy.
The four apps that violated Google’s repayment length policy – 10MinuteLoan, Ex-Money, StuCred and Extra Mudra – had 30-day loan ads on their app and were downloaded at least 1.5 million times.
Reuters flagged those apps to Google on December 18 and were taken down from India’s Play Store within four days.
In response to a Reuters query about offering loans requiring full repayment in 60 days or less, Stukred said: “Google has unilaterally decided that FinTech apps cannot be on their App Store, for those Passes are repaid under 30 days, even though no law has been passed relating to that which would require such action on their (Google’s) part. “
Many other apps say on their Play Store listings that the minimum repayment period they offer is more than three months, but in fact their tenure is often between seven and 15 days according to 15 borrowers and their screenshots.
Those apps include CashBean, Moneed, iCredit, CashKey, RsFly and RupPlus, which have been downloaded nearly 12 million times in total.
Moned said that it followed RBI rules and no company doing so should be allowed to do business. In response to a Reuters query on whether it had offered loans requiring full repayment in 60 days or less, she said: “We support 90 days repayment for the loan cycle.”
CashBean also said that it follows RBI guidelines. It states, “Our customer care lines remain open to all our borrowers at all times.” It did not directly address a question as to whether it offered a loan tenure of 60 days or less.
CashKey, iCredit, RsFlyly and Rupyplus did not respond to emails seeking comment and were not available by phone.
The lending app industry has separately drawn police scrutiny, which they say is investigating dozens of apps after the suicide of at least two borrowers in the past month, as they and their family were allegedly Debt collection was harassed by agents.
Police have not revealed the identities of those in the investigation.
Debt-collection harassment is prohibited under RBI regulations, which say that collection agents cannot harass borrowers by “constantly harassing” them, or contacting their family or acquaintances.
A Reuters review of 50 popular lending apps available on Google Play found that nearly all of them needed to allow borrowers access to their phone contacts.
Mahesh Dammati, a 28-year-old technical employee from Hyderabad who lost his job during the COVID-19 lockdown, was unable to repay a loan of Rs 6,000 taken from an app called Slice. He said that the recovery agents used his contact list to repeatedly call his family and friends, which he demanded to pay on his behalf.
Slice said it followed RBI rules and did not engage in harassment.
Nupur Anand’s reporting; Additional reporting by Jatindra Dash and Sudarshan Varadan; Editing by Euan Rocha and Pravin Char