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  • Philip Osadebay - Tech Journalist

Google's Loan App Issue In India has no quick solution

The public, the government, and Google are simultaneously becoming concerned about loan applications. These predatory apps have taken advantage of helpless people, tricking them into signing up for quick, paperless loans that will bite them later in many ways. These borrowers face harassment for payments, sometimes even being coerced into evasive behaviour.

These malicious apps may be downloaded, registered, and used to borrow money from Android smartphone users through the Google Play Store. The first inclusion of these apps by Google has drawn criticism. Is it Google's fault? The truth is that the situation is not straightforward, and Google has revealed its opinions on loan apps and the subsequent problems that citizens of the nation experience.

"There are various angles from which to see it. Does having these apps benefit users?" The Senior Director & Head of Trust & Safety, Google APAC Saikat Mitra, explains why these lending apps are necessary, saying that since the pandemic and its impact on job losses, people have demonstrated a need for loans.

Instead of outlawing all lending applications, according to Google, other, more stringent regulations should be put in place to prevent the spread of mistrust that some bad apples are producing in the industry. We've seen that bad people tend to follow when many people utilise a product. Mitra noted that the demand for lending apps had accelerated the growth of these scam-related incidents.

He also emphasised that because Google doesn't profit from these loan apps, it has no commercial incentive to place them on the Play Store. To improve things, Google now demands that all these loan applications prominently name their underwriters, and failing to do so makes the risk of the app being removed from the Play Store.

Before listing any app on the Play Store, Google has a two-layer scan procedure in place, and the same is true for these loan apps. When a loan application is uploaded, it goes through several scans. Our developer policies allow or disallow these apps. Technical and content policy scans are available on Google. We look for illegal content on the side of content policy.

He went on to describe the process used to examine loan applications. Several checks are required for loan applications to determine the loan rates and other details. The primary regulation change we have made concerning lending applications is the requirement that loan apps explicitly indicate whose underwriter they are linked with so that not just Google but the user as well. As Dutta underlines when describing the justification for the new rule, the RBI regulations stipulate that a bank or an NBFC must underwrite the loan app provider and that the RBI also provides a list of NBFCs and banks to block or blacklist them.

Problem With Bad Loan Applications Spreads to the Real World

Most events involving bad loan applications that we have heard about indicate that both the digital and physical worlds are concerned. People must download one of these harmful apps to their phones and register with their information before using it. After that, most of the action takes place offline, and Google is aware of these problems. Dutta explains the extent of the bad loan problem. We must acknowledge that the problem with the loan app is primarily an offline problem, which means that all the terrible things are happening elsewhere.

He points out that Google frequently collaborates with law enforcement to take action against problematic loan apps, which has led to the removal of more than 2000 loan apps. The corporation is hopeful that the new regulations will limit the influence of these disruptive apps on people's daily lives.


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