Nirmala Sitharaman explains steps to verify illegal operations of fraudulent loan applications

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Nirmala Sitharaman explains steps to verify illegal operations of fraudulent loan applications

FM outlines steps to verify illegal loan application operations

New Delhi-

Finance Minister Nirmala Sitharaman at a meeting discussed various issues related to illegal loan applications and decided to take a set of measures to verify the operations of these applications, amid increasing cases of digital fraud.

Most digital lending apps are not registered with the central bank and operate on their own. There have been increasing cases of alleged suicides of borrowers due to harassment by a few operators of digital lending applications.

The meeting, chaired by the Minister, took place on Thursday and it was decided that the RBI will prepare a whitelist of all legal applications and the Ministry of Electronics and Information Technology (MeitY) will ensure that only such applications are hosted in the application stores.

The Reserve Bank of India will monitor the “mule/leased” accounts that can be used for money laundering and review/cancel dormant non-bank accounts to avoid their misuse.

The Finance Ministry said in a statement on Friday that the central bank will also ensure that the registration of payment pools is completed within a time frame and no unregistered payment pool will be allowed to operate after that.

As part of the procedures to verify the spread of such applications, the Ministry of Corporate Affairs (MCA) will identify and deregister shell companies to prevent their abuse.

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Besides, steps should be taken to increase cyber awareness among customers, bank employees, law enforcement agencies and other stakeholders about these applications.

All ministries or agencies have been asked to take all possible measures to prevent the operation of these applications.

During the meeting, the Minister of Finance expressed concern about the increasing cases of illegal loan applications offering micro loans/credits, especially to vulnerable and low income groups with very high interest rates and processing/hidden fees, and predatory recovery practices involving extortion and criminality. intimidation and so on.

Sittraman also pointed to the possibility of money laundering, tax evasion, data breach/privacy, abuse of unregulated payment aggregators, shell companies, defunct non-bank financial firms etc. to perpetrate such actions, she said.

The meeting was attended by the Minister of Finance, Secretary of Economic Affairs and Secretary of Revenue who also has additional responsibility for the Secretary of Financial Services for Corporate Affairs, Secretary of the Ministry, Deputy Governor of the Reserve Bank of India and Executive Director of the Reserve Bank of India. PTI DP DP ANU ANU