Google toughens rules for personal loan apps in India with strict new guidelines
Google is cracking down on personal loan apps in India and Indonesia with new guidelines for each country. App developers will have to comply with the updated policy by September 15, 2021, and the rules include new mandatory eligibility criteria in order to remain on the Play Store.
The announcement comes after concerns were raised about how short loan apps were targeting users in the country. In January, Google said it had removed hundreds of person loan apps based on complaints from users, and government agencies.
The additional requirements for personal loan apps on the Play Store in India are listed as follows:
Apps will need to complete a “Personal Loan App Declaration for India”. They will also have to provide the necessary documentation to support this declaration. For example, if an app has got the requisite license from the Reserve Bank of India for disbursing personal loans, they will have to submit a copy of the same to Google for review.
Google says apps that are “not directly engaged in money lending activities and are only providing a platform to facilitate moneylending by registered Non-Banking Financial Companies (NBFCs) or banks to users,” will have to reflect this information accurately in their declaration. There are several personal loan apps, including from players such as Xiaomi, Realme, which provide a platform for other third-party lending services via their own personal loan apps. This will likely apply to them.
Further, the developer account name also needs to reflect the name of the associated registered business name which is provided in the declaration.
In January, Google had said it would only allow personal loan apps where full repayment was required in greater than or equal to 60 days from the date the loan being issued. It had also said in the blogpost that their policy makes it clear that loan apps clearly reveal, information “such as the minimum and maximum periods of repayment, the maximum Annual Percentage Rate, and a representative example of the total loan cost.” The search giant had said it would remove apps that failed to comply with its policies and also assist the law enforcement agencies in their investigation of this issue.
According to Google Play Store policies, a personal loan app is defined as one which “lends money from one individual, organization, or entity to an individual consumer on a nonrecurring basis, not for the purpose of financing the purchase of a fixed asset or education.”
Consumers “require information about the quality, features, fees, repayment schedule, risks, and benefits of loan products in order to make informed decisions about whether to undertake the loan,” according to the policy. Mortgages, car loans, student loans, revolving lines of credit (such as credit cards, personal lines of credit) are not included in personal loans.
Personal loans apps must also “comprehensively disclose the access, collection, use, and sharing of personal and sensitive user data.”
In a separate blog post, Google has also announced “additional details for the upcoming safety section in Google Play.” The post notes that “this new safety section will provide developers a simple way to showcase their app’s overall safety.” It will also explain to users the privacy and security practices of the app, and why certain data is collected.
The new section will highlight whether an app uses data encryption, follows Google’s Families policy, and whether it “has been independently validated against a global security standard,” according to the blog. A user will be able to tap further and see what type of data is collected, including location, contacts, personal information and how this data is used, and whether the “data collection is optional or required in order to use an app.”