Lending apps have long been a source of income for both app developers and consumers in India. However, the Ministry of IT’s recent announcement that it plans to ban over 90 lending apps has sent a panic throughout the industry as many scramble to understand why they have been impacted. The move is reportedly aimed at protecting India’s integrity and curbing China’s influence in the South Asian market. Despite this uncertainty, many developers are adamant about adapting their products to comply with government regulations, hoping that continued popularity will help them weather these changes.

According to IT Ministry officials and influential think tank Niti Aayog, the government’s decision to ban anonymous electronic financial transactions is based on security concerns, not religious intolerance or politics. The officials cited privacy concerns as the main reason for the ban, noting that it is difficult to trace illegal activities associated with anonymous financial transactions.

The IT Ministry is concerned about the historic or current presence of Chinese investors on the cap tables of some lending apps in India, and has asked the Indian app companies to remove these investors. The ministry is worried that these Chinese investors are using their influence to pressure the app companies into giving them favourable terms, potentially resulting in unsafe loans being given to vulnerable Indians.

One concern that has been raised about companies like Huawei is the security of their devices. The officials said that, unfortunately, these concerns are not unfounded and that Huawei has been known to be involved in cybercrimes. In addition to this, the Ministry of Home Affairs has received reports of Chinese firms having access to some Indian lending apps through APIs, which they are using to store Indian consumers’ data outside of the country. This presents a significant cybersecurity concern for India as it could allow China access to sensitive information about its citizens.

According to ministry officials, the fraudulent and illegal activities uncovered by the Enforcement Directorate demonstrate the need for updates in India’s anti-money laundering laws. The government is currently working on new regulations that will better target loan sharks and other criminals involved in illicit money transactions.

The crackdown on PayU’s LazyPay, fintech Kissht, and Indiabulls Home Loans has left the industry scrambling to find their own compliances efforts. Chinese players were initially believed to be the only ones impacted by the ban, but this has now been disproven as many other apps offer gambling and betting services. The uncertainty surrounding the legality of these services means that companies within the industry are struggling to figure out how best to comply with government regulations.

Ola is a prominent online cab company that has been in operation since 2012. The company provides an app for Android and iOS devices, as well as a website and desktop version. Ola operates in 26 Indian cities, with plans to expand to over 100 by the end of 2019. The company reportedly operates on a loss but has been investing heavily in new technologies and expansion. In February 2019, O

Indian consumers have long complained about dodgy loan-collection practices and abysmal customer service from some telcos, according to officials. But now some apps are also getting impacted because of their sketchy business models and practices. These apps rely on high-interest loans from lenders who may not always be reputable, which has led to a slew of complaints from Indian customers.

India has been aggressive in banning Chinese apps in recent years, with links to the country said to worsen clashes at the border. This is likely due to Beijing’s development of militarized zones near Indian borders and its increasing influence in neighboring nations.

The Indian government has banned dozens of apps including ByteDance’s TikTok, Xiaomi’s Community and Video Call apps and Alibaba Group’s UC Browser and UC News in mid-2020. These bans come following a series of allegations made against these various apps by the government. The allegations concern issues such as children using these apps to post inappropriate content, addictive behavior, and fraudulent activities. In light of the allegations, the Indian government decided that it would be better for parents to have access to all of these types of Apps so that they can monitor their children’s use thereof.

It is not clear what specific actions New Delhi is taking against apps from other countries, but it has previously said that it will take action if the apps violate local laws.

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Dylan Williams

Dylan Williams is a multimedia storyteller with a background in video production and graphic design. He has a knack for finding and sharing unique and visually striking stories from around the world.

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