Fintech players confused after app ban, say clueless about govt's reasons

Companies approach MeitY for answers and report cloned platforms on red list; Google reviewing directive to restrict apps on Play Store

Confusion prevailed in the Indian lending application and fintech ecosystem on Tuesday after the Ministry of Electronics and Information Technology (MeitY) began to block over 200 apps and websites earlier this week, even as some hinted at the Centre listing cloned versions among those being struck down.

The Digital Lenders’ Assoc­iation of India (DLAI) said it was unaware of such action. “As of today, we as an association have not received any formal communication from MeitY on restricting any digital lending app or any warning on any fraudulent practices,” said the industry body in a statement.

“We are clueless. We tho­ught there was a clampdown on China-backed lending fir­ms. Associations as well as co­m­panies are engaging with the ministry. LazyPay and Kissht were the first to do so. But we have no information on why this was done (by the government),” said an industry player on condition of anonymity.

Some of the apps that have ostensibly been blocked are Indiabulls Home Loans, mPokket, Faircent, KreditBee, PayU and Kissht. While many internet service providers (ISPs) have blocked access to these websites, Google is re­viewing a directive to restrict apps on its Play Store.

“Google has received a government request to res­trict apps from the Play Store in India. It is evaluating the order and will restrict apps as appropriate after a thorough review,” said a source in the know. Google declined to comment.

The uncertainty has left companies in confusion.

Ranvir Singh, founder, Kissht, said: “We are aware that Google has been asked to take down a list of companies including ours from the Play Store. But we are unaware about the reason behind such a notification. We are meeting officials to seek clarification. Kissht has no Chinese stakeholders.”

He added that the Kissht app was functioning smoothly for customers across India. “While we haven’t received any formal notification on the status of our app, we are aware of the development and are seeking clarity. We are hopeful that this will be resolved soon without interrupting services for our existing users.”

“The problem is that no one knows the reason. No one knows if this is related to Chinese apps only, or earlier ED (Enforcement Directorate) raids or some other issue. Companies and associations are reaching out to the ministry to understand,” said another founder and CEO of a fintech and lending player on condition of anonymity.

The stakeholders have also pointed out that the list of blocked apps, which the Centre had shared, included names that were not of authentic firms. For instance, KreditBee said that the URL (kreditbee.en.aptoide.com) mentioned in the list does not belong to them. “It’s a cloned platform,” said a source. The same was true for mPokket.

Starting on Sunday, MeitY began blocking 138 betting and 94 Chinese loan apps citing their alleged involvement in money laundering and that they posed a threat to India’s financial security, sources said.

The latest crackdown on illegal platforms with Chinese links started after a nodal officer of the Ministry of Home Affairs was alerted. The ministry has issued blocking orders for the apps on an urgent and emergency basis, sources said.

The DLAI statement also said that the association and its members had been following a mandatory code of conduct. “We are committed towards responsible growth of digital lending and the fintech sector, with a focus on expanding the reach of formal financial services to larger groups of customers. Our 90+ members follow a mandatory code of conduct and follow the guidelines specified by various regulatory authorities.”

In June 2020, the government had announced a similar move when it took down 59 Chinese mobile apps — including the popular SHAREit, TikTok, UC Browser, and SHEIN — citing them to be security threats. Over 200 platforms with Chinese links have been banned since then.

The mobile lending apps, which offer instant personal loans from a few hundred rupees to about Rs 10,000, are also known as “Chinese loan apps” due to their business model of small financing. Investigative agencies have found that many of the apps illegally offer loans for terms ranging from seven days to a month. Several borrowers have complained about the platforms blackmailing them if they miss the due dates of repayment.