Lok Sabha Question No. 3803 (UNSTARRED), answered on 2026-03-16
Subject: Growing Menace of Illegal Loan Apps
Ministry: FINANCE
Asked by: Shri G Lakshminarayana, Dr. Mohammad Jawed

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF FINANCIAL SERVICES

## LOK SABHA UNSTARRED QUESTION NO. 3803

ANSWERED ON MONDAY, MARCH 16, 2026/PHALGUNA 25, 1947 (SAKA)

## Growing Menace of Illegal Loan Apps

## 3803.  DR. MOHAMMAD JAWED: SHRI G LAKSHMINARAYANA:

Will the Minister of FINANCE be pleased to state:

(a)whether the Government is aware of the growing menace of illegal and unregulated loan apps operating in the country and offering loans through unauthorised digital platforms, if so, the details thereof;

- (b) the steps taken by the Government to identify, block and take action against such illegal loan apps, including coordination with RBI, law enforcement agencies, app stores and digital intermediaries to protect citizens from harassment and fraud;
- (c) the existing legal and regulatory provisions to penalise such entities;
- (d) whether the Government has any data estimating the amount of money cheated or extorted through illegal loan apps, if so, the details thereof; and
- (e) the number of cases registered and actions taken against illegal loan apps during the last five years, year-wise?

## ANSWER

## THE MINISTER OF STATE IN THE MINISTRY OF FINANCE

## (SHRI PANKAJ CHAUDHARY)

(a) to (c): The Government has been constantly engaging with the Reserve Bank of India (RBI) and  other  concerned  Regulators/stakeholders  to  curb  the  growing  menace  of  illegal  and unregulated loan apps operating in the country. RBI has issued regulatory guidelines on digital lending, which aims at enhancing customer protection and making digital lending ecosystem safe and sound. These guidelines also have detailed provision regarding recovery, data privacy, and customer grievance redressal mechanisms which are mandatory for the Regulated Entities (REs), the Lending Service Providers (LSPs) engaged by them and the Digital Lending Apps (DLAs). RBI has further issued the 'Framework for Self-Regulatory Organisation(s) in the FinTech Sector' (SRO-FT framework) on 30.05.2024 for establishing and enforcing regulatory standards,  promoting  ethical  conduct,  ensuring  market  integrity,  resolving  disputes,  and fostering transparency and accountability among its members.

Ministry of Electronics and Information Technology (MeitY) issues directions for blocking of information, including illegal loan apps under Section 69A of Information Technology (IT) Act,  2000  after  following  the  due  process  as  provided  in  the  Information  Technology (Procedure and Safeguards for Blocking for Access of Information by Public) Rules, 2009.

Further, the Government and RBI have been taking up various initiatives from time to time to identify, block and take action against such illegal loan apps to. These inter-alia, include:

(i) RBI has operationalized a directory 'Digital Lending Apps (DLAs)' on its website with effect  from  01.07.2025, consisting of all  DLAs deployed by REs of RBI. The directory aims to aid the customers in verifying the claim of a Digital Lending Apps (DLA's) association with a RE.

(ii)  Proactively  engaging  with  the  major  internet  intermediaries  and  messaging platforms to review the operations of unauthorized loan apps. The digital intermediaries have also been instructed to strengthen their Appstore onboarding process and postdeployment testing by instituting continuous behavioral-analytics for digital lending apps.

(iii) Indian Cyber Crime Coordination Centre (I4C), Ministry of Home Affairs (MHA) has been proactively analysing the digital lending apps. In order to facilitate the citizens to report cyber incidents including illegal loan apps, MHA has launched a National Cybercrime Reporting Portal (www.cybercrime.gov.in) as well as a National Cybercrime Helpline number '1930'.

(iv)  The  banks  through  the  public  facing  platform  'SACHET'  portal  and  the  interregulatory  State  Level  Coordination  Committee  (SLCC)  facilitate  the  citizens  for lodging of any complaints against specific entity related to deposit/ collection of money illegally.

(v) RBI and banks have been taking up awareness campaigns through short SMS, radio campaign,  publicity  on  prevention  of  'cyber-crime',  including  illegal  loan  apps. Further, RBI has been conducting electronic-banking awareness and training (e-BAAT) programmes which focus on awareness about frauds and risk mitigation.

(d)&(e):  'Police'  and  'Public  Order'  are  State  subjects  as  per  the  Seventh  Schedule  of  the Constitution of India. The States/UTs are primarily responsible for the prevention, detection, investigation and prosecution of crimes including cyber-crime through their Law Enforcement Agencies  (LEAs).  The  Central  Government  supplements  the  initiatives  of  the  States/UTs through advisories and  financial assistance under various schemes for capacity  building of LEAs.

******