87 Loan Apps Banned in India as Government Acts Against Fraud, Harassment and Data Theft

In a move that will definitely impact the protection of digital users, the Indian government has decided to block 87 illegal loan applications active in the country. The order came from the Ministry of Electronics and Information Technology (MeitY) under the permissions granted by Section 69A of the Information Technology Act, 2000, according to Minister of State for Corporate Affairs Harsh Malhotra's report in the Lok Sabha.

Reasons for the Ban

These illegal loan apps, generally termed as “instant loan apps,” have been causing unknowing users to get trapped in debts while also taking very high interest rates — at times even 25% monthly. To cite a few complaints along with financial exploitation, the platforms have been accused of user harassment, unauthorized use of data, stealing personal data, and even blackmail. It has been reported that people who do not pay back the loans have been threatened with morphed pictures of their loved ones and facing the same person's calls in such a manner that they feel being terrorized.

By taking this action, the government is trying to not only avoid new users getting entrapped in these predatory platforms but also stop further scams before they explode in magnitude. It is very common for the apps that have been banned to try and rebrand themselves, which gives rise to similar challenges where the authorities are required to come up with solutions.

The Action Has Legal Support

Minister Harsh Malhotra said that the government is utilizing the technical powers of the IT Act as well as Companies Act provisions to protect the residents. He added, “If at any point, there is an infringement of the Companies Act, 2013, legal proceedings will follow.”

Such an integrated approach not only works against financial exploitation but also safeguards users' mental wellbeing, preventing harassment and data theft, thus contributing to making a more secure digital space for the entire populace.

Impact on Users

The crackdown has now made millions of Indians immune to the danger posed by the unprincipled moneylenders who are taking advantage of the system's loopholes. Monitoring of the digital lending sector remains very close by the authorities, ensuring that the banned apps can't easily return under the guise of new names.