They are additionally anticipated to submit certificates exhibiting that they’re regulated by the Reserve Bank of India (RBI), the sources mentioned.
This comes after a gathering between authorities officers and fintech founders on Tuesday throughout which the latter had sought readability on why regulated on-line lending apps had been being banned.
Fintech corporations more likely to be affected by the order additionally met officers of the Ministry of Electronics and IT (MeitY) on Wednesday to debate the best way ahead, an individual conscious of the consultations informed ET.
During the dialogue, a few of these fintech companies had been questioned about their buyers and capital construction, and had been additionally requested to submit supplementary paperwork.
“Some of the companies that met yesterday have submitted their shareholding documents. The ministry had asked some of these companies whether they were regulated by the RBI or not. As proof of that, regulatory certificates are being sought. Once those documents come in, MeitY will consult with the RBI on further steps,” a authorities official mentioned on situation of anonymity.
Discover the tales of your curiosity
ET reported on February 8 that MeitY, the Ministry of Home Affairs (MHA) and the RBI are anticipated to carry discussions over the subsequent few days to chart out the subsequent steps on the app ban.Google, which operates its Play Store for Android apps, has additionally obtained the ban order and is in session with MeitY on the ultimate listing, ET reported citing sources.
Another individual conscious of the matter mentioned that MeitY had sought paperwork to confirm particulars such because the board composition of those lending platforms and the final word beneficiaries of the businesses working these apps.
“It seems that through discussions and various questions, MeitY is trying to find out whether any of the apps have Chinese partners or investors. The ministry is basically trying to cull out the good ones from the bad actors,” mentioned a 3rd one who was conscious of the discussions that passed off on Wednesday.
Uncertainty continues
As uncertainty continues on the ultimate listing of digital lending apps more likely to be banned, senior executives of fintech corporations have been taking inventory of the state of affairs throughout a number of conferences held by trade associations.
“The meetings are largely to understand the way forward. Since there is so much confusion, no official stance has been crystallised upon yet (by the industry bodies),” mentioned one of many sources quoted earlier.
During a press convention on Wednesday after its financial coverage announcement, RBI governor Shaktikanta Das mentioned the central financial institution had requested non-banking monetary corporations (NBFCs) to submit an inventory of apps being operated by them. This was subsequently handed on to the federal government.
“Based on the list, the government has made its move,” he said.
The RBI’s submission of a whitelist to the government follows a September 2022 high-level meeting chaired by finance minister Nirmala Sitharaman, which was attended by secretaries of finance, economic affairs, revenue, financial services, electronics and information technology, in addition to an RBI deputy governor and executive director.
At the meeting it was decided that RBI will prepare a whitelist of legal digital lending apps, and that MeitY would ensure that only the whitelisted apps are hosted on app stores.
Further, it was also decided that all ministries and agencies will “take all possible actions to prevent operations of such illegal loan apps”.
ET reported earlier this week, citing a authorities supply, that the ban was on account of three broad categorisations – first, the listing of apps embrace people who could have final or partial possession with Chinese entities; second, lending apps which aren’t regulated by the RBI and which can be storing information in Chinese servers, and lastly, apps being run by corporations towards which buyer complaints of restoration harassment have been made.
On Monday, ET was the primary to report that the federal government order banning 94 lending apps on Sunday additionally included apps of Indian companies.
Aptoide situation
MeitY’s diktat additionally contains apps listed on various app shops similar to Aptoide that are used to sideload them on Android smartphones.
Most of those fintech companies have shrugged off their associations with these third-party app shops.
One of the apps featured on MeitY’s ban listing – mPokket – mentioned that the area title talked about within the doc was a “clear instance of impersonation and has no affiliation” with the corporate in anyway.
“Aptoide is a third-party app store with which we have no official or unofficial partnership. We suspect that it may be a proxy app on Aptoide and are looking into it further. Blocking of such apps protects both the consumer and lenders,” the corporate mentioned in a press release on Wednesday.
Source: economictimes.indiatimes.com