Government is in a mood to break the trap of Loan App…Finance Minister is strict, know why it became a cause of concern?
Minister of State for Finance Dr. Bhagwat Karad had recently told in the Rajya Sabha that Google has removed about 2,200 fake loan apps from its Play Store in a year. These apps were removed between September 2022 and August 2023, which were frauding people.
In the country, people are losing their lives by getting trapped in loan apps and many examples of this have come to light in recent times. These cases have increased the concern of the government and now the government is in a mood to strictly control the distribution of unauthorized loans through online apps. Finance Minister Nirmala Sitharaman has instructed the Reserve Bank of India (RBI) and other financial regulators to deal with them. This issue was discussed in depth in the 28th meeting of the Financial Stability and Development Council (FSDC) held on Wednesday.
Finance Minister Sitharaman gave these instructions
Finance Minister Nirmala Sitharaman, in this FSDC meeting held on Wednesday, has asked the financial sector regulators including RBI to take additional steps to curb the spread of unauthorized loan distribution through online apps and deal with them strictly. . The Finance Minister has also directed the financial regulators to maintain constant vigil and remain proactive in detecting emerging financial stability risks in view of the domestic and global macro financial situation.
What is Instant Loan?
The number of companies providing loans through online loan apps is increasing. Here it is important to know what is Instant Loan App? So let us tell you that this is such a mobile application through which any person can take a loan immediately. There are many banks and non-banking financial companies (NBFCs) in India, which are providing instant loans to the customers. As per the name, it does not take time to get a loan from them and does not require much paperwork. To take a loan through the loan app, one does not have to visit the bank and the work is done within minutes by registering online. But as simple as this process is, it is equally risky.
Action continues on fake loan apps
In fact, among those distributing loans through apps, a large number of fake loan apps are also working, through which people are becoming victims of fraud. Recently, Union Minister of State for Finance Bhagwat Karad had told in a written reply to a question in the Rajya Sabha that Google has removed about 2,200 fake loan apps from its Play Store in a year. It was told by the government that these apps were removed between September 2022 and August 2023, which were defrauding the people. Now, during the meeting, the Finance Minister has also monitored such existing loan apps and has given instructions to take strict action against them.
A laughing family was destroyed in Bhopal.
A big case of side effect of taking loan through this loan app was much talked about last year, when an entire happy family got trapped in this debt trap in Neelbad of Ratibad police station area of Bhopal. A couple fell into the trap of loan app and embraced death along with their two innocent children. This step was taken by the couple as they were being threatened by the company running the online loan app. The deceased had blamed the loan app for this in his 4-page suicide note.
RBI has made new guidelines
The case of Bhopal is not the first case of incidents happening due to these loan apps, but such incidents are coming to light every day. Keeping these in mind, recently the Reserve Bank of India (RBI) had issued new guidelines regarding the penalty imposed on delay in loan repayment, which has come into effect from January 1, 2024. Under this, customers will not have to pay penalty for failing to repay the loan. The guidelines issued regarding penal charges in loan account will be applicable to all banking institutions regulated by RBI.
