ETtech looks at the timeline to understand how it unfolded
February 5: The government issued orders to block 138 betting and gambling apps and 94 quick loan-providing apps on an “urgent” and “emergency” basis for “improper data storage and transfer” to other countries as well as money laundering, sources said.
In total, 232 apps were banned by the Ministry of Electronics and Information Technology (MeitY) in its orders. Some of these apps have Chinese origin and the blocking orders were issued by the IT ministry based on information and inputs from the Union Home Ministry, a source told ET.
“These apps contained material which is prejudicial to sovereignty and integrity of India,” one of the officials said.
This was also the first time the government moved to ban quick-loan apps which have Chinese origins. Most of these apps, sources said, had Indian people working and directors.
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February 6: ET reportedthat the government order to ban 94 lending apps also included apps of Indian firms, according to an official.Fintech platform PayU’s buy-now-pay-later service LazyPay’s website was taken down following a notice from MeitY. PayU is owned by South African and Dutch group Naspers.
“The website has been blocked as per the order of the Ministry of Electronics and Information Technology under the IT Act, 2000,” LazyPay said on its website late on Monday.
Kissht, another lending platform, was also unavailable for users in India.
Kissht cofounder Ranvir Singh had told ET: “We are reaching out to MeitY to resolve this as soon as possible as lakhs of our customers who avail our services are impacted. This will impact their ability to use credit for productive purposes”.
February 9: The lending platforms that fell under a list of apps blocked by the Centre submitted documents detailing their shareholding structure to the government, sources privy to the development had told ET.
They were also expected to submit certificates showing they are regulated by the Reserve Bank of India (RBI), the sources said.
This came after a meeting between government officials and fintech founders on Tuesday during which the latter had sought clarity on why regulated online lending apps were being banned.
During the discussion, some of these fintech firms were questioned about their investors and capital structure, and were also asked to submit supplementary documents.
“It seems that through discussions and various questions, MeitY is trying to find out whether any of the apps have Chinese partners or investors. The ministry is basically trying to cull out the good ones from the bad actors,” said another person who was aware of the discussions that took place.
February 10: MeitY started issuing orders to internet service providers (ISPs) and Play Store operator Google to unblock some of the digital lending apps and websites it had banned in its February 5 order.
This came after the platforms submitted documents to the government proving they were regulated entities.
One of the people privy to the matter said MeitY was sending individual orders and that revocation orders have been sent out for a few platforms including PayU-owned LazyPay and Kissht.
Others that were a part of MeitY’s list to be unblocked on Friday include Indiabulls Housing Finance’s indiabullshomeloans.com, buddyloan.com, faircent.com and Aptoide versions of some digital lending platforms such as KreditBee and mPokket.
“MeitY has received documents from several platforms over the last few days and has been scrutinising the submissions to ascertain whether the ban was necessary or not. We have concluded that some of these platforms need not be blocked and, therefore, some ban orders are being revoked,” a government official said.
Also read | ETtech Explainer: why are quick-loan apps under the government scanner?
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