New Delhi: Federal Finance Minister Nirmala Sitharaman, in a meeting with the trustees and senior officials of the Reserve Bank of India, outlined multiple steps to prevent illegal loan application operations operating outside normal banking channels. The meeting was attended by the Minister of Finance, the Secretary of Economic Affairs and the Secretary of Revenue and Corporate Affairs (Additional Officer). financial services secretary; Electronics and Information Technology Secretary: Deputy Governor of RBI and Executive Director of RBI.
The meeting was held on Thursday. During the meeting, the Minister of Finance expressed his concern about the increasing cases of illegal loan applications offering micro loans/credits, especially to people with low income and at risk with very high interest rates and processing/hidden fees, predatory recovery practices involving extortion, criminal intimidation etc., According to an official statement issued by the Ministry of Finance.
The department said Sittraman also pointed out the possibility of money laundering, tax evasion, data breach/privacy, abuse of unregulated payment pools, shell companies, non-operating non-profit financial firms, etc. to perpetrate such actions.
After detailed deliberations on the legal, procedural and technical aspects of the matter, it was decided at the meeting that: RBI will prepare a “whitelist” of all legal applications and MeitY will ensure that only such “whitelist” applications are hosted in app stores.
RBI will monitor “mule/rental” accounts that can be used for money laundering and to review/cancel dormant NBFCs to avoid misuse and RBI will ensure that payment collectors registration is completed in a time frame and there is no unregistered payment collector. Then allowed to work.
During the meeting, it was also agreed that the Ministry of Corporate Affairs would identify and deregister shell companies to prevent their misuse, and that steps should be taken to increase cyber awareness for customers, bank employees, law enforcement agencies and other stakeholders.
In the statement, the ministry said the Finance Ministry will monitor actionable points for compliance on a regular basis.