The government has requested the Reserve Bank of India (RBI) to compile a “white list” of legitimate applications that will be authorised in app stores in order to combat the proliferation of illicit lending apps outside of the normal banking channels. In addition, the central bank will monitor money laundering through mule/rented accounts, take aggressive measures to terminate dormant NBFC licenses, and remove unregistered payment aggregators within a certain time period.
Thursday’s meeting, headed by finance minister Nirmala Sitharaman, resulted in the decision. During the discussion, different topics linked to unlawful loan applications were examined. Fraud cases involving digital lending applications that are not registered with the central bank and operate independently are on the rise.
During the meeting, it was also resolved that the central bank will ensure the registration of payment aggregators within a certain timeframe, and no unregistered payment aggregator will be permitted to operate thereafter. To avoid their exploitation, the corporate affairs ministry will identify shell firms and deregister them.
All ministries and government entities have been instructed to take all measures feasible to prohibit the functioning of such applications. Customers, bank staff, law enforcement agencies, and other stakeholders will be instructed to become more cyber-aware.