{"id":1288686,"date":"2024-12-20T09:44:59","date_gmt":"2024-12-20T04:14:59","guid":{"rendered":"https:\/\/trak.in\/stories\/?p=1288686"},"modified":"2024-12-20T09:45:34","modified_gmt":"2024-12-20T04:15:34","slug":"govt-can-ban-unregulated-lending-via-digital-loan-apps-rs-1-crore-penalty-proposed","status":"publish","type":"post","link":"https:\/\/trak.in\/stories\/govt-can-ban-unregulated-lending-via-digital-loan-apps-rs-1-crore-penalty-proposed\/","title":{"rendered":"Govt Can Ban Unregulated Lending Via Digital Loan Apps; Rs 1 Crore Penalty Proposed"},"content":{"rendered":"\n<p>The government has proposed a bill to regulate digital lending and create an online database listing authorized lenders while tackling unauthorized apps. The bill includes provisions for ethical lending practices, reporting <a href=\"https:\/\/m.economictimes.com\/news\/economy\/policy\/centre-proposes-bill-to-ban-unregulated-lending\/amp_articleshow\/116482062.cms\">illegal lenders<\/a>, and a central repository for regulated lenders to address consumer concerns about unauthorized entities in the digital lending ecosystem.<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"1000\" height=\"465\" src=\"https:\/\/trak.in\/stories\/wp-content\/uploads\/2024\/12\/ify-40.png\" alt=\"Govt Can Ban Unregulated Lending Via Digital Loan Apps; Rs 1 Crore Penalty Proposed\" class=\"wp-image-1288695\" srcset=\"https:\/\/trak.in\/stories\/wp-content\/uploads\/2024\/12\/ify-40.png 1000w, https:\/\/trak.in\/stories\/wp-content\/uploads\/2024\/12\/ify-40-300x140.png 300w, https:\/\/trak.in\/stories\/wp-content\/uploads\/2024\/12\/ify-40-768x357.png 768w\" sizes=\"auto, (max-width: 1000px) 100vw, 1000px\" \/><\/figure>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Key Proposals of the Bill<\/strong><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Online Database of Regulated Lenders<\/strong>: The government plans to establish a centralized repository to list all regulated lenders, enabling consumers to verify authorized entities.<\/li>\n\n\n\n<li><strong>Regulation of Unregulated Digital Lending<\/strong>: Activities not currently covered by existing laws, except loans to relatives, are included under this bill.<\/li>\n\n\n\n<li><strong>Definition of Public Lending Activities<\/strong>: Lending activities conducted by individuals or entities for profit are considered public lending, excluding loans to relatives.<\/li>\n<\/ul>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Industry Reactions<\/strong><\/h3>\n\n\n\n<p>Experts are calling for a <strong>principle-based approach<\/strong> to ensure innovation in the Indian fintech sector is not stifled. According to Soumitra Majumdar, Partner at JSA Advocates &amp; Solicitors, the draft bill&#8217;s prescriptive approach may hinder the sector&#8217;s momentum.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>RBI\u2019s Role and Initiatives<\/strong><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Digital Lending Apps Repository<\/strong>: The RBI has proposed a public repository of digital lending apps (DLAs) used by regulated entities to help consumers distinguish authorized apps from unauthorized ones.<\/li>\n\n\n\n<li><strong>Action Against Unauthorized Apps<\/strong>: Between 2021 and 2023, Google removed thousands of unauthorized loan apps from its Play Store following government directives.<\/li>\n<\/ul>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Addressing Consumer Concerns<\/strong><\/h3>\n\n\n\n<p>The proposed central repository aims to establish a foundation for <strong>ethical lending practices<\/strong>, addressing the lack of transparency in digital lending transactions. Mayank Arora, Director-Regulatory at Nangia Andersen India, highlighted the issue of consumers being unaware of real lenders due to the absence of physical interactions, which unregulated entities exploit.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>A Step Towards Ethical Digital Lending<\/strong><\/h3>\n\n\n\n<p>The new bill reflects the government\u2019s commitment to protecting consumers and enhancing transparency in the digital lending ecosystem. By curbing unauthorized entities and creating a regulated framework, the bill seeks to build trust and stability in the digital financial sector.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The government has proposed a bill to regulate digital lending and create an online database listing authorized lenders while tackling unauthorized apps. The bill includes provisions for ethical lending practices, reporting illegal lenders, and a central repository for regulated lenders to address consumer concerns about unauthorized entities in the digital lending ecosystem. Key Proposals of [&hellip;]<\/p>\n","protected":false},"author":30,"featured_media":1288695,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21],"tags":[6750,1332],"class_list":["post-1288686","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-digital-lending-app","tag-loan-apps"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.9 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Govt Can Ban Unregulated Lending Via Digital Loan Apps; Rs 1 Crore Penalty Proposed - Trak.in - Indian Business of Tech, Mobile &amp; Startups<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/trak.in\/stories\/govt-can-ban-unregulated-lending-via-digital-loan-apps-rs-1-crore-penalty-proposed\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Govt Can Ban Unregulated Lending Via Digital Loan Apps; Rs 1 Crore Penalty Proposed - Trak.in - Indian Business of Tech, Mobile &amp; Startups\" \/>\n<meta property=\"og:description\" content=\"The government has proposed a bill to regulate digital lending and create an online database listing authorized lenders while tackling unauthorized apps. The bill includes provisions for ethical lending practices, reporting illegal lenders, and a central repository for regulated lenders to address consumer concerns about unauthorized entities in the digital lending ecosystem. 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