India’s push to ban over 90 lending apps has sent shockwaves to the fintech industry as many scramble to understand why they have been impacted. The Ministry of Electronics and IT’s move is reportedly aimed at protecting the nation’s integrity and curb China’s influence in the South Asian market, the state-owned broadcaster Prasar Bharti said on Sunday.
In meetings with fintech associations on Tuesday, officials from the IT Ministry and influential think tank Niti Aayog offered broader explanations about the decision.
The IT Ministry is concerned about the past and current presence of Chinese investors on the cap tables of some lending apps in India, the officials said, according to a source familiar with the matter.
Another concern is the rising reports of cybercrimes that are linked to China. The officials said the Ministry of Home Affairs has received reports of criminal activities involving Chinese firms that are tapping APIs to access Indian lending apps and obtaining and storing data of Indian consumers outside of the country, the source said.
Separately, India’s Enforcement Directorate, the country’s anti-money laundering force, has identified criminal proceeds of over $255 million, the Ministry of Finance said Tuesday in a statement. “Illegal” loan apps were used to generate and acquire laundered capital, it added.
The ban – which seeks to crack down on over 232 apps, more than half of which offer gambling and betting services – was initially understood to only impact Chinese players. But the abrupt action on Monday against PayU’s LazyPay, fintech Kissht, Indiabulls Home Loans left the industry scrambling to assess their own compliances efforts.
The list, yet to be publicly published but a copy of which was seen by TechCrunch, also includes versions of Ola’s Avail Finance, KreditBee, TrueBalance and MPokket on third-party Android marketplaces.
Google has received the order from the Ministry of Electronics and Information and Technology and…
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