Government Takes Action Against Online Loan Fraud, Blocking 87 Illegal Loan Apps Nationwide

The Indian government has formally blocked 87 illegal loan applications, marking a significant step towards protecting customers from unsafe and unregulated online financing services. The Ministry of Electronics and Information Technology (MeitY) took action under Section 69A of the IT Act of 2000, which permits the government to block access to damaging online information and services. Many of these illegal digital lenders operated without the Reserve Bank of India's (RBI) clearance and employed unethical recovery strategies. Users around the country have claimed harassment, exorbitant interest rates, exploitation of personal information, and threats from loan app operators.

By prohibiting these applications, the government aims to prevent new users from downloading or connecting with these harmful platforms. This measure directly limits their reach, lowering the likelihood of more people becoming victims to predatory loan practices. At the same time, the Ministry of Corporate Affairs is conducting continuing investigations into organisations that engage in online loans. These checks include inspections, enquiries, and extensive investigations under the Companies Act of 2013. If any violations are discovered, thorough legal action is taken to hold these businesses accountable. This dual approach as blocking apps under the IT Act and going after organisations under corporate law provides a significantly stronger line of defence against illegal networks.

The government's goal is to create a more secure digital financial ecosystem in which fintech growth is not detrimental to consumer safety. As digital loans become more common, data protection, fair loan procedures, and transparency have become critical. Authorities anticipate that this action would serve as a strong message to other fraudulent operators who seek to deceive vulnerable consumers. Such crackdown is a crucial step in India's efforts to keep digital finance secure, regulated, and trustworthy for millions of consumers.

Information referenced in this article is from Business Today