Pressure On Google By Indian Government To Aid In Stopping Illegal Lending Apps

According to sources, the Indian government and central bank have asked Alphabet Inc.’s Google to enact stricter controls to help reduce the use of illegal digital lending applications in India.

Despite the fact that Google is outside the Reserve Bank of India’s (RBI) purview, the central bank and the Indian government have reportedly called the American tech giant to meetings on several occasions in recent months and urged it to implement stricter checks and balances that could aid in eliminating such apps, according to four sources.

Regulators in India have already requested that lenders increase their scrutiny of the illegal lending apps that became popular during the pandemic.

Regulators work to prevent the spread of these apps that carry out dishonest activities like charging exorbitant interest rates and fees, engaging in recovery practices that are not permitted by the central bank, or violating money laundering and other legal requirements.

The Play Store developer program policy for financial services apps was revised last year, according to Google, and it now includes additional requirements for personal loan apps in India starting in September 2021.

“We have removed over 2,000 personal loan apps targeting India from the Play Store for violation of the Play policy requirements,” a Google spokesperson said, adding that such steps are taken if its policies are violated.

“We will continue to engage with law enforcement agencies and industry bodies to help address this issue,” the spokesperson added.

Google is responsible for enforcing this rule and ensuring compliance, even though the Indian central bank mandates that any lending apps that are listed on app stores be supported by regulated entities.

Another directly involved industry source claims that Google has also been asked to investigate reducing the spread of such apps through other distribution channels, such as websites and other download options.

Google is also starting to respond to grievances brought forth by trade associations.

“Earlier Google would not respond to complaints on individual apps. Now they are more proactive and do look into it when a complaint is flagged to them,” said one of the four industry sources directly involved in the matter and who has been briefed about discussions with Google.

A white list of approved loan applications is being created by the government and RBI. The borrower must deal directly with a bank for lending and recovery under rules established by the central bank, which can deter the use of third-party recovery agents.

With Android being the platform used by 95% of smartphones in India, Google dominates the app market there.

An email requesting comments from the RBI and the Ministry of Electronics and Information Technology did not receive a prompt response.

In 2021–2022, $2.2 billion in digital loans were made possible by India’s rapidly expanding digital lending market. It’s unclear how much of that comes from apps using questionable methods.

Customers are frequently reached by these lenders through advertisements on websites like Facebook and Google.

According to a blog post on its website, Google will launch a new advertising policy for financial services in India starting the following month.

According to the policy, advertisers must be verified as being located in India in order for their ads to run there. According to the blog, advertisers must show proof of their licenses with the relevant financial services regulator as part of the verification process.

(Adapted from


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s