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Finance Minister Nirmala Sitharaman has called upon financial sector regulators, such as the Reserve Bank of India (RBI), to adopt supplementary measures to curb the rise of unauthorized online lending.

At the 28th Financial Stability and Development Council (FSDC) meeting, Sitharaman emphasized the importance of regulators maintaining vigilance and taking proactive steps to identify potential risks to financial stability, given the prevailing domestic and global macro-financial conditions.

The discussions in the meeting centered around strategies to mitigate the adverse impacts of unauthorized lending via online apps and measures to prevent their proliferation.

The FSDC discussed macro-financial stability issues and India’s readiness to handle them, according to an official statement released after the meeting.

The council also addressed ongoing inter-regulatory matters to assist GIFT IFSC in its strategic goal of becoming one of the world’s leading international financial centres and fulfilling its intended role of facilitating foreign capital and financial services for the domestic economy.

The FSDC discussed various strategies for implementing FSDC decisions and Union Budget announcements. These included standardising KYC norms, enabling inter-usability of KYC records across the financial sector, simplifying and digitising the KYC process, initiating fundraising by social enterprises through social stock exchanges, and taking measures to halt the detrimental effects of unauthorised online lending and prevent its further spread.

Google removed 2500-plus fraud apps
In December, the government informed Parliament that Google had suspended or removed over 2,500-plus fraudulent loan apps from its Play Store between April 2021 and July 2022.

The goal is to stay proactive, maintain cybersecurity readiness, remain constantly vigilant, and take suitable and timely action to mitigate any vulnerabilities in the Indian financial system.

Fraudulent loan apps have swindled many unsuspecting borrowers, causing distress in numerous instances.

The FSDC members agreed to enhance inter-regulatory coordination to further grow the financial sector so that it continues to supply the necessary financial resources for inclusive economic growth.

The FSDC acknowledged the efforts of the FSDC Sub-Committee, led by RBI Governor Shaktikanta Das, and the actions taken by members on previous FSDC decisions.

  • Published On Feb 22, 2024 at 12:49 PM IST

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