The Indian government has barred 87 unauthorised loan applications following rising concerns about data privacy violations, harassment, and fraudulent financial activity. The Ministry of Electronics and Information Technology (MeitY) executed the order under Section 69A of the Information Technology Act, 2000.
The action was disclosed in the Lok Sabha by Minister of State for Corporate Affairs, Harsh Malhotra, who highlighted the growing threat posed by non-regulated digital lending platforms. Many of these apps operated without approval from the Reserve Bank of India (RBI) and were found to be engaging in coercive recovery tactics, excessive interest charges, and unlawful access to users’ personal data.
Regulatory Crackdown on Digital Lending Misconduct
By blocking the identified applications, the government aims to prevent further public exposure to non-compliant financial entities, while sending a firm warning to operators of unregulated digital lending platforms.
In addition to the technology-driven action, Malhotra noted that the Ministry of Corporate Affairs is independently pursuing enforcement under the Companies Act, 2013. Investigations, inspections, and inquiries are underway against corporate entities involved in illegal digital lending activities.
“Whenever any violation under the Companies Act, 2013 is found, appropriate legal action is taken,” Malhotra stated, reinforcing the government’s zero-tolerance stance.
Protecting Consumers and Strengthening Fintech Regulation
The coordinated approach—combining digital access restrictions under the IT Act and legal enforcement under corporate laws—signals a broader push toward safer and more accountable digital lending practices. The initiative aligns with ongoing reforms to formalise fintech growth without compromising consumer rights or financial stability.
The move is expected to serve as a strong deterrent to unauthorised lenders and strengthen trust in India’s formal digital finance ecosystem.
Summary
India has blocked 87 illegal loan apps under the IT Act, citing misuse of personal data, predatory lending practices, and regulatory violations. The government is simultaneously pursuing legal action under the Companies Act against involved entities. The crackdown aims to protect consumers and reinforce regulatory oversight in the rapidly expanding digital lending sector.
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