The Reserve Bank of India (RBI) is considering intensifying its measures to combat the escalating problem of cyber fraud by proposing the establishment of a Digital India Trust Agency (DIGITA). The primary aim of this agency would be to authenticate digital lending applications and maintain a public registry of approved apps. This initiative is anticipated to serve as a crucial safeguard in the ongoing battle against financial crimes within the digital landscape.
The Verification Process for Enhanced Transparency
Insiders familiar with the matter have disclosed that once DIGITA becomes operational, it will assume the responsibility of scrutinizing digital lending apps through a rigorous verification process. This initiative seeks to introduce greater transparency and accountability into the rapidly expanding digital lending sector, which has been marred by a surge in fraudulent activities and unethical practices in recent times.
The RBI has already furnished a list of 442 distinct digital lending apps to the Ministry of Electronics and Information Technology (MeitY) for potential inclusion in Google’s whitelist. In February of this year, the government disclosed in Parliament that Google had removed over 2,200 digital lending apps from its app store between September 2022 and August 2023.
Collaboration between the Government and Google
Bhagwat K Karad, the Minister of State for Finance, revealed that based on information provided by MeitY, Google had evaluated approximately 3,500 to 4,000 loan apps from April 2021 to July 2022, resulting in the suspension or removal of more than 2,500 apps from its Play Store.
The partnership between the government and Google has played a pivotal role in eliminating fraudulent practices and safeguarding consumers from falling victim to unscrupulous lending apps. The establishment of DIGITA is poised to bolster these collaborative efforts and establish a more secure environment for digital lending.
The RBI’s proactive stance in addressing cyber fraud through the proposed Digital India Trust Agency is a commendable step that is poised to instill trust in the digital lending ecosystem. By ensuring that only authenticated apps are permitted to operate, the central bank aims to protect the interests of borrowers and promote responsible lending practices in the digital era.
