Have removed personal loan apps that violated safety policies: Google India

The tech giant Google said it has reviewed hundreds of personal loan apps in India that were flagged by users and government agencies and those found to be violating its user safety policies were immediately removed from its Play Store.

Google has asked the developers of the remaining identified apps to demonstrate that they comply with applicable local laws and regulations, failing which those apps will also be removed.

"Providing a safe and secure experience across Google's products is our top priority. Our global product policies are designed and implemented with this goal in mind, and we're always working to improve our practices to enhance user safety," Google said in a blogpost that has been posted by Suzanne Frey, Vice President, Product, Android Security and Privacy.

Google did not disclose the names of the apps removed.

"We have reviewed hundreds of personal loan apps in India, based on flags submitted by users and government agencies. The apps that were found to violate our user safety policies were immediately removed from the store, and we have asked the developers of the remaining identified apps to demonstrate that they comply with applicable local laws and regulations," the blogpost said.

Apps that fail to do so will be removed without further notice; and in addition, Google will continue to assist the law enforcement agencies in their investigation of this issue, it added.

On Wednesday, Reserve Bank of India (RBI) announced constitution of a working group to suggest regulatory measures to promote orderly growth of digital lending amid rising incidents of harassments relating to online lending.

It had also noted that the recent spurt and popularity of online lending platforms/mobile lending apps has raised certain serious concerns which have wider systemic implications. Last month, RBI had cautioned the public not to fall prey to the growing number of unauthorised digital lending platforms and mobile apps.

In its blogpost, Google said all developers on its Play Store agree to the terms of the Google Play Developer Distribution Agreement, which stipulates that apps must adhere to applicable rules and laws, including generally accepted practices and guidelines.

"In addition, the Google Play Developer Policy requires financial services apps that offer personal loans to disclose key information such as the minimum and maximum periods of repayment, the maximum annual percentage rate, and a representative example of the total loan cost," it added.

To help further ensure that users are making sound choices, Google only allows personal loan apps with full repayment required in greater than or equal to 60 days from the date the loan is issued, it said.

"We believe transparency of information around the features, fees, risks, and benefits of personal loans will help people make informed decisions about their financial needs, thereby reducing the risk of being exposed to deceptive financial products and services," Google added.

The company said developers must only request permissions that are necessary to implement current features or services and that they should not use permissions that give access to user or device data for undisclosed, unimplemented, or disallowed features or purposes.

Developers must also only use data for purposes that the user has consented to, and if they later want to use the data for other purposes, they must obtain user permission for the additional uses, Google emphasised.

"Google Play users expect a safe, secure and seamless experience, and developers come to Play for powerful tools and services that help them build and grow their businesses. Our policies help us deliver on these expectations, and we continue to work hard to ensure Google Play is a platform that supports the entire ecosystem," Google said.

How things came to such a pass

At least 10 Indian lending apps on Google's Play Store, which have been downloaded millions of times, breached Google rules on loan repayment lengths aimed at protecting vulnerable borrowers, according to a Reuters review of such services and more than a dozen users.

Four apps were taken down from the Play Store - where the vast majority of Indians download phone apps - after Reuters flagged to Google that they were violating its ban on offering personal loans requiring full repayment in 60 days or less, the news agency reported earlier this week.

Three of these apps - 10MinuteLoan, Ex-Money and Extra Mudra - didn't return calls and emails seeking comment.

The fourth app, StuCred, was allowed back on the Google Play store on 7 January after it removed the offer of a 30-day loan. It denied engaging in any unscrupulous practices.

At least six other apps remain available at the store that offer loan repayment lengths, or tenures, some as low as seven days, according to 15 borrowers and screenshots of loan details from all six apps shared with Reuters.

Some of these apps apply steep processing fees, as high as 2,000 rupees ($27) on loans of less than 10,000 rupees with tenures of 30 days or under, according to the 15 borrowers. Together with other charges including one-off registration costs, borrowers can pay, in real terms, interest rates as high as 60% per week, their loan details show.

By comparison, Indian banks typically offer personal loans with annual interest rates of 10-20%, and they usually do not have to be repaid in full for at least a year.

The rise of smartphones and affordable mobile internet in India has seen a proliferation of hundreds of personal lending apps in recent years. Campaign groups say rapid advances in technology have outpaced authorities and are calling for regulations to be introduced regarding loan tenures and fees.

"There are no clear norms on lending apps in India. Right now they fall in a grey zone," told Nikhil Pahwa, a digital rights activist and editor of MediaNama, a Delhi-based publication on technology policy, to Reuters.

The four apps found to have breached Google's repayment length policy - 10MinuteLoan, Ex-Money, StuCred and Extra Mudra - were advertising loan tenures of 30 days on their apps and had been downloaded a total of at least 1.5 million times.

Reuters flagged those apps to Google on Dec. 18 and they were taken down from the Play Store in India within four days.

In response to a Reuters query about whether it had offered loans that required full repayment in 60 days or less, StuCred told Reuters: "Google has unilaterally decided that fintech apps cannot be on their apps store which have repayments under 30 days, even though no law relating to the same has been passed that would require such action on their (Google's) part."

Several other apps say on their Play Store listings that the minimum repayment length they offer is over three months, but in reality their tenures often range between seven and 15 days, according to the 15 borrowers and their screenshots.

Those apps include CashBean, Moneed, iCredit, CashKey, RupeeFly and RupeePlus, which have been downloaded a total of nearly 12 million times.

The lending app industry has separately attracted the scrutiny of police who say they are investigating dozens of apps following the suicides of at least two borrowers in the past month after they and their families were allegedly harassed by debt-recovery agents.

The police haven't disclosed the identities of the those under investigation.

Debt-recovery harassment is prohibited under RBI rules which say collection agents cannot harass borrowers by "persistently bothering" them, or by contacting their family or acquaintances.

The Reuters review of 50 popular lending apps available on Google Play found that nearly all of them require borrowers to give them permission to access their phone contacts.