Stating that the government and regulators such as RBI were constantly engaged in controlling fraudulent loan apps, the minister told the Lok Sabha that the issue is regularly discussed by the Financial Stability Development Council, a forum headed by her with representatives from other regulatory and government departments as members.
“The objective is to remain proactive, maintain cyber security preparedness with constant vigil and take appropriate and timely action, to mitigate any such vulnerabilities in the Indian financial system,” Sitharaman said.
While RBI issued guidelines on digital lending, it has also shared a “whitelist” with the government, which was given to Google. Between April 2021 and July 2022, Google also reviewed approximately 3,500 to 4,000 loan lending apps. Further, based on complaints and its analysis, the Indian Cyber Crime Coordination Centre (I4C) has also been flagging certain apps to the ministry of electronics and information technology, she said.
While several other steps, including a framework for financial education in school criteria, are planned, the finance minister also said that the new guidelines have detailed provisions on recovery, data privacy and grievance redressal related to digital lending.
Responding to another question, the government told the lower house that it has also managed to block funds that had been siphoned off from bank accounts through fraudulent means.
With cases of cyber crime and phishing on the rise, the department of financial services in the finance ministry had held detailed consultations with RBI, banks and representatives from I4C, where an action plan to further tighten the rules was discussed.
Officials have indicated that more steps, including steps to help block funds quickly, are planned to reduce instances of frauds. The agencies are considering blocking phones used for frauds instead of the current system that often results in SIMs being blocked.
