Remove fraud loan app ads in a week, Centre tells online platforms

The government is also working on framing amendments to the current Information Technology (IT) Rules to bar social media platforms from hosting such advertisements, a top government official said. Once that is in place, platforms could risk losing their legal immunity for hosting such advertisements.

“Intermediaries/ platforms should take additional measures to not permit any advertisements of illegal loan and betting apps having potential to scam and mislead the users, the consequences of which will be the sole responsibility of the intermediaries/ platforms,” states the advisory.

“This is in reaction to the findings of some of the stories you have done. The IT Ministry has been discussing the issue for several months with the Reserve Bank of India, but we have recently intensified our effort to find a solution to this problem,” Minister of State for Electronics and IT Rajeev Chandrasekhar told The Indian Express.

“We have had conversations with both the RBI and Finance Ministry at the highest levels and we are working on a robust mechanism to deal with loan apps that will be rolled out soon,” he said.

“Under rule 3 (1) (b) of the IT Rules, our intent is to add specifically that intermediaries cannot host advertisements of fraud loan apps as part of their due diligence requirements for retaining safe harbour,” Chandrasekhar said.

As part of a months’ long investigation into dubious loan apps, The Indian Express had spoken to a range of stakeholders including borrowers, fintech intermediaries, government functionaries, big tech companies and former RBI officials.

A number of victims caught in the crosshairs of these apps pointed towards a common narrative: In the absence of any government and regulatory norms, online platforms carry out little due diligence, letting fraudsters openly advertise predatory loan apps. The RBI doesn’t have a white list of registered loan apps, or even a negative list which is updated, despite the government’s assurances.

During a meeting chaired by the Finance Services Secretary last month, a decision was taken, yet again, to prepare a white list of loan apps through consultations with relevant stakeholders.

Tuesday’s advisory also sought strict compliance from platforms with the IT Rules, requiring them to curb the spread of artificial intelligence (AI)-based misinformation, or deepfakes.

“Today, a formal advisory has been issued incorporating the ‘agreed to’ procedures to ensure that users on these platforms do not violate the prohibited content in Rule 3(1)(b), and if such legal violations are noted or reported, consequences under law will follow,” Chandrasekhar said in a press statement.

The ministry has also asked the platforms to strengthen their in-app content reporting and grievance mechanisms to make users aware of the various penal provisions of the Indian Penal Code (IPC) 1860, IT Act, 2000 and other such laws that may be attracted in case of violation of the IT Rules.

The advisory is the latest in a series of communications and notices sent to intermediaries, asking them to follow the norms prohibiting the hosting, display or sharing of certain content such as child sexual abuse material, pornographic content, or allowing illegal loan apps to advertise on their platform.