Fintech firms demand uniform regulations | Economic Times

Mumbai: Miffed by Google’s diktat to furnish their credentials, fintech lenders have now written to the tech giant citing its policies of not allowing lenders disbursing short-tenure loans of less than 60 days. Fintech lenders say that Google is acting like a super regulator, seeking details that even the Reserve Bank of India (RBI) is yet to do.“We have written to Google on the need for uniform regulations among fintech players, Google says you can’t have a lending product which is less than 60 days while all these apps had 7-14 day products,” said a member of FACE (Fintech Association for Customer Empowerment).The member, who preferred to remain anonymous, said that many of these apps are China-led entities. “We have approached Google on why these China-led apps are allowed to run while we have such restrictions,” said the member. “We have also written to Google with names of these Chinese-led companies.”ET had earlier reported that Google India has initiated a review exercise where it has put the onus on the developers of hundreds of lending applications live on Play Store to establish their credentials and prove that they are in compliance with relevant local laws. Fintech lenders are unhappy with this move.80320903A mail sent to Google seeking comments didn’t elicit a response. Suzanne Frey, vice-president for product, Android security and privacy at Google in a blog post last week had stated that “hundreds of personal loan apps” are being reviewed based on flags received by users and government agencies.Over 100 money lending apps such as CashGuru, 10MinuteLoan and RupeeClick have also been barred from the Play Store as on Sunday. Among the domestic fintech apps affected, PayU’s credit platform LazyPay also has been taken down, even as a company spokesperson said that this was due to “administrative lag” and not because of non-compliance. “Google is not the regulator to ask for our licence number or certificate copy or the NBFCs that we are backed by. What authority does it have,” questioned an official at a lender that had received such communication from Google. “It should not become the super regulator after collating so much data on us. What we want are simple, common guidelines for all fintech lenders on tenure and interest rates.”According to Anurag Jain, the president of Digital Lenders Association of India (DLAI), the dubious apps exploit several loopholes to fool customers and bypass Google’s Play Store norms. For instance, a loan app may not upfront disclose the tenures of their loans.“What these shady lending apps are doing is they are showing it as a 60 days loan; it turns out to be a shorter tenure loan. They are bypassing Google’s policies and fooling the customers, too,” said Jain. He is also the chief executive of KredX, an invoice discounting platform.DLAI has sent representations to both Google and RBI highlighting the concerns specified by Jain. According to experts, on most occasions these apps are individuals or companies lending their own money without an NBFC licence where the loan agreements are between borrowers and individuals. “There were a lot of overseas players from Indonesia, China and Hong Kong that came in this space. There were a few limited players creating shell companies that in turn ran 10-15 apps each. They did this to not attract any attention to any single brand,” said Madhusudan Ekambaram, cofounder CEO at KreditBee.Industry insiders estimate that there are at least 500 such loan apps that are in violation of Google’s policies as well as the central bank norms.