MHA asks states, UTs, to take stringent action against lending apps; Maharashtra Cyber to strengthen security

The Union Home Ministry (MHA) on Sunday sought urgent strict action against the lending apps or the Instant Loan mobile applications infamous for harassment, blackmail, and hard recovery practices. Subsequently, the Maharashtra Cyber Police too have started strengthening their claws at the state level.

Speaking to this newspaper, Superintendent of Maharashtra Cyber Police Sanjay Shintre said, “This matter has been in progress for some time now. For the same, we have written a letter to the Reserve Bank of India and to Google India as well requesting the approval of apps only after the app has acquired the Non-Banking Financial Company (NBFC) registration. Once and only after this registration certificate, these apps can enter the digital market, thus proving it’s an authenticity to law enforcement agencies as well as the citizens.”

He also added that in case of the absence of NBFC, they shall not be allowed to venture into their business as then they become an unauthorized lender. NBFC is registered with the RBI and thus the company or entity can prove that they are regulated by law.

Shintre continued, “In any case, if they are found unauthorized or with a record of fraud, we have requested the RBI to register a case against them to prevent more cyber crimes from happening.”

MHA in the communication to all states and Union territories said that the issue has caused a “serious impact on national security, economy and citizen safety”. The lenders use the borrowers’ confidential personal data like contacts, location, photos, and videos for blackmail and harassment.

“Harsh recovery practices followed by these illegal lending apps have claimed many lives across India. The data is misused to harass and blackmail the citizens using morphed images and other abusive practices by recovery agents located in India as well as overseas violating RBI’s Fair Practices Code,” the communication said.

The home ministry also said that law enforcement agencies can avail of the services of the National Cyber Crime Forensic Laboratory (NCFL), which is a part of the Indian Cyber Crime Coordination Center.

“All states and UTs are requested to take strict legal action in this regard. Further, all states and UTs are also requested to spread mass awareness in all districts against the risks of using such apps,” the communication further instructed.

Reportedly, the Enforcement Directorate recently froze Rs. 9.82 crores of Chinese-controlled loan apps parked in merchant IDs with payment gateway companies.

(with agency inputs)