Google banned over 2,000 instant loan apps from Play Store in H1 2022

Google has banned over 2,000 apps offering instant loan services to customers between January and June this year, in light of these apps violating the company’s Play Store policies. Speaking at a roundtable on Thursday, Saikat Mitra, senior director, and head of trust and safety at Google Asia-Pacific, said that the bans enforced by the company were put in place after a combination of policy violations, user reports, and collaboration with various law enforcement agencies and policy bodies.

“The bans that we enforce include evaluation of data that we collect ourselves — as well as what we collate from offline, third-party sources,” Mitra said. This information, he added, could include details such as acts of customer harassment over phone calls made by these instant loan service providers.

The apps that have been banned include services that were specifically catering to the Indian market itself. However, there was no specific focus on cracking down upon apps with links to China.

“In terms of the policies that we enforce on the Play Store for instant loan apps, the policy requirements are in line with what Indian regulations have. We do not enforce our own regulations in this sector,” Mitra said.

Google’s update on the matter comes after numerous complaints about instant loan apps with fraudulent practices have spammed Indian users. After an increasing volume of consumer complaints started surfacing regarding instant loan apps on mobile app stores, the Reserve Bank of India (RBI) took cognizance of the matter — issuing an advisory in December 2020 against using unauthorised instant loan apps.

On August 11, the RBI issued a fresh set of guidelines for digital lending firms to follow — including disclosure of all hidden costs, no involvement of third parties in bank transfers of instalment receipts, or disbursals to user accounts, and so on.

Unregulated instant loan services have typically targeted individuals from low-income groups without a clear understanding of the loan process, who were looking for quick access to funds. While these instant loan apps offered small-ticket loans of anywhere between ₹2,000 and ₹10,000, they charged interest rates as high as 50% per annum, as well as similar late fee charges.

Additionally, such apps would gain access to a customer’s entire contact list. Failing to pay back these loans would lead to these companies not only charging these above-mentioned exorbitant interest and penalties — but also contacting family and peers of their defaulting customers, and subsequently harassing them with abusive messages.

Subsequent to user complaints, the Enforcement Directorate (ED), a law-keeping agency under the Union Ministry of Finance, has begun cracking down on these apps as well. Earlier this month, on August 4, the ED announced that it has frozen and attached total financial assets worth ₹264 crore — belonging to companies that operated instant loan services in India. Such services were also deemed to have had links with China, and operated under guise of having partnerships with non-banking financial corporations (NBFCs) in the country.

The ED is also investigating India’s cryptocurrency exchanges for having facilitated a path for these services to launder money away from Indian shores.

Google, on its part, banned 30 instant loan apps from its Play Store, the app market on Android devices, in India in January last year. Google’s removal came a month after the initial RBI advisory against digital lending services. Since then, numerous state and national government bodies have filed notices urging Google to ban digital lending services from its Indian app store.

The most recent of such instances took place on June 6, when Maharashtra Cyber, the state’s government-linked nodal cyber security agency, asked Google to ban 69 instant loan apps under reports of consumer harassment and lack of compliance with Indian laws. It is not clear if Google followed through with the bans — or if the latter made for a part of the 2,000-odd instant loan apps that the company claims to have banned in India.