The days of fraudulent lenders may be soon over with Google deciding to implement stringent criteria for personal loan companies, thus, protecting vulnerable borrowers from succumbing to fraudulent or dangerous financial products or services.
The rules would come to effect on May 31, 2023, thus, shielding prospective consumers from losing their details to fraudulent companies and scammers. Google is planning to modify its “Personal Loans Policy” to prevent the misuse of confidential customer data.
Apps that provide personal loans or have the primary purpose of facilitating access to personal loans will not be allowed to access sensitive data such as photos and contacts, as announced by the tech giant.
A release shared by Google read, “This policy applies to apps that offer loans directly, lead generators, and those who connect consumers with third-party lenders. If you are not directly engaged in money lending activities and are only providing a platform to facilitate money lending by registered Non-Banking Financial Companies (NBFCs) or banks to users, you will need to accurately reflect this in the declaration.
In addition, the names of all registered NBFCs and banks must be prominently disclosed in your app’s description. If your app contains or promotes financial products and services, you must comply with state and local regulations for any region or country that your app targets - for example, include specific disclosures required by local law.”
Google urged personal loan app companies in India to complete the “Personal Loan App Declaration” for India and provide the necessary documentation to support their declaration, such as submitting a copy of the license if the company is licensed by the Reserve Bank of India (RBI) to provide personal loans.
The decision came after the RBI requested the tech giant in 2022 to have in place strict guidelines to help mitigate the use of unlawful digital lending applications in India.
Even though Google does not fall under the RBI’s purview, the company was summoned to meetings by the central bank and the Indian government numerous times in the past few months to ensure the implementation of stricter checks and balances that could aid in the weeding out of such unwanted apps from the company’s Play Store.