Loan Apps Ban: You will not be able to give loans without the permission of the Central Government, apps giving forced loans will be banned, a fine of crores will be imposed…

Loan Apps Ban: The central government is planning to ban apps that give loans without permission. The government has presented a draft bill regarding this scheme. In this bill, it has been said that there will be a ban on online loan apps that violate the rules. Along with this, there is also a proposal of Rs 1 crore fine and 10 years jail.

The bill comes at a time when fraudulent loan apps have become a matter of concern due to their extortionate practices, high interest rates and hidden fees. This information has been given in a report of Business Standard. These measures were first suggested in the November 2021 report of the Reserve Bank of India (RBI) working group on digital lending.

What is the purpose of the government's draft bill?

The title of this draft bill of the Central Government is – Ban on Unregulated Lending Activities (BULA). The objective of this bill is to ban individuals and companies from giving loans to people without taking permission from RBI or any other regulatory body.

Special things related to the government's draft bill

Digital lending platforms have also been included in this bill. Unauthorized platforms cannot provide loans legally.

Giving unauthorized loans can result in imprisonment of 7 to 10 years and a fine of Rs 2 lakh to Rs 1 crore.

At the same time, if the lenders adopt extortion methods, they will be sentenced to 3 to 10 years in jail.

Cases involving several states and union territories or involving large amounts of money will be handed over to the CBI.