https://sputnikglobe.com/20221031/india-issues-alert-following-multiple-suicides-due-to-digital-loan-apps-1102862808.html
India Issues Alert Following Multiple Suicides Due to Digital Loan Apps
India Issues Alert Following Multiple Suicides Due to Digital Loan Apps
Sputnik International
Last month, the Reserve Bank of India released guidelines on digital lending to protect citizens from harassment. As per an estimate, 220 million people are... 31.10.2022, Sputnik International
2022-10-31T09:35+0000
2022-10-31T09:35+0000
2022-12-08T16:29+0000
india
loan
digital
digital currency
harrassment
cyber crime
google play store
indian home ministry
reserve bank of india
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The Indian Home Ministry has issued an alert to the states, warning that digital lending apps are becoming a national security threat with multiple suicides reported across the country.The ministry urged the authorities of 28 states and eight Union Territories to initiate probes and take strict legal action, including launching a mass public awareness campaign in over 600 districts about the “risks of using such apps”.What's more, the National Forensic Laboratory, which operates as part of the Indian Cyber Crime Coordination Center, has been tasked with providing technical support on loan app analysis, malware analysis, and crypto transaction tracing.The actions comes just days after Chinese nationals were arrested for digital lending app fraud. These illegal apps provide short-term loans or micro-credit at exorbitant interest rates with processing fees or hidden charges, especially to vulnerable and low-income people. The initial probe found that lenders use the borrowers' confidential personal data like contacts, location, photos and videos for blackmail and harassment.A Reserve Bank of India (RBI) report published last November suggests that digital lending increased more than 12-fold during the COVID-19 pandemic, as many people across the country faced financial hardship and were in urgent need of money. “Customers are initially tempted to borrow from these entities because of simplified requirements or no documentation needed, followed by prompt disbursals. It is only later that the customers realize the serious downsides to such borrowings,” RBI Governor Shaktikanta Das said last Friday.With the number of suicide cases of gullible debtors increasing by the day across the country, the Enforcement Directorate, the nation’s financial crimes investigator, initiated a probe that has led to the arrest and seizure of funds related to digital loan apps last month.The apex bank summoned Google and other tech giants several times, urging them to weed out illegal lending apps. As per the industry estimate, India’s digital lending market may grow to $350 billion by 2023 from $9 billion in 2012.
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india, loan, digital, digital currency, harrassment, cyber crime, google play store, indian home ministry, reserve bank of india
india, loan, digital, digital currency, harrassment, cyber crime, google play store, indian home ministry, reserve bank of india
India Issues Alert Following Multiple Suicides Due to Digital Loan Apps
09:35 GMT 31.10.2022 (Updated: 16:29 GMT 08.12.2022) Last month, the Reserve Bank of India released guidelines on digital lending to protect citizens from harassment. As per an estimate, 220 million people are eligible for loans from regulated financial institutions, leaving three fourths of the population to rely on unregulated lending options such as digital loan apps and private money lenders.
The Indian Home Ministry has issued an alert to the states, warning that digital lending apps are becoming a national security threat with multiple suicides reported across the country.
"Harsh recovery practices followed by the illegal lending apps have claimed many lives across India. This issue has caused a serious impact on national security, the economy, and citizens' safety," the Home Ministry said in a letter obtained by Sputnik.
The ministry urged the authorities of 28 states and eight Union Territories to initiate probes and take strict legal action, including launching a mass public awareness campaign in over 600 districts about the “
risks of using such apps”.
What's more, the National Forensic Laboratory, which operates as part of the Indian Cyber Crime Coordination Center, has been tasked with providing technical support on loan app analysis, malware analysis, and crypto transaction tracing.
The actions comes just days after Chinese nationals were arrested for digital lending app fraud.
These illegal apps provide short-term loans or micro-credit at exorbitant interest rates with processing fees or hidden charges, especially to vulnerable and low-income people. The initial probe found that lenders use the borrowers' confidential personal data like contacts, location, photos and videos for blackmail and harassment.
“It has been learnt that this is an organized cybercrime executed using disposable emails, virtual numbers, mule accounts, shell companies, payment aggregators, API services, cloud hosting, cryptocurrency, etc.,” the Home Ministry observed.
A Reserve Bank of India (RBI) report published last November suggests that digital lending increased more than 12-fold during the COVID-19 pandemic, as many people across the country faced financial hardship and were in urgent need of money.
18 October 2022, 13:32 GMT
“Customers are initially tempted to borrow from these entities because of simplified requirements or no documentation needed, followed by prompt disbursals. It is only later that the customers realize the serious downsides to such borrowings,” RBI Governor Shaktikanta Das said last Friday.
With the number of suicide cases of gullible debtors increasing by the day across the country, the Enforcement Directorate, the nation’s financial crimes investigator, initiated a probe that has led to the arrest and seizure of funds related to digital loan apps last month.
Besides the RBI, the telecom regulator TRAI will also come up with a comprehensive policy to remove hundreds of such apps available on Google Play stores.
The apex bank summoned Google and other tech giants several times, urging them to weed out illegal lending apps.
As per the industry estimate, India’s digital lending market may grow to $350 billion by 2023 from $9 billion in 2012.
