Google to restrict personal loan apps from Play Store starting today

Google is all set to impose restrictions for personal loan apps that make the customer's data vulnerable. Starting May 31, the tech giant will restrict apps that expose users to deceptive or harmful financial products and services, it said in a statement adding that for the purposes of the new policy, the company will consider financial products and services to be those related to the management or investment of money and cryptocurrencies, including personalized advice.

"This policy applies to apps that offer loans directly, lead generators, and those who connect consumers with third-party lenders," the company added.

The company also said that any app that contains or promotes financial products and services, must comply with state and local regulations for any region or country that the app targets. For example, include specific disclosures required by local law, it further explained.

Google has categorised the apps and explained the nature of apps that will be restricted under this new policy.

- Binary Options

Apps that provide users with the ability to trade binary options will be restricted under the new policy

- Cryptocurrencies

Google restricts apps that mine cryptocurrency on devices but permits apps that remotely manage the mining of cryptocurrency.

- Personal loans

Personal loan apps or apps with the primary purpose of facilitating access to personal loans (for example, lead generators or facilitators) are prohibited from accessing sensitive data, such as photos and contacts. The following permissions are prohibited- Read_external_storage, Read_media_images, Read_contacts, Access_fine_location, Read_phone_numbers, Read_media_videos

- High APR personal loans

The company already has a policy in the U.S. that doesn't allow apps for personal loans where the Annual Percentage Rate (APR) is 36% or higher. This policy applies to apps that offer loans directly, lead generators, and those that connect consumers with third-party lenders.

For India, Google has urged personal loan apps to complete the Personal Loan App Declaration for India and provide the necessary documentation to support their declaration for example if the company is licensed by the Reserve Bank of India (RBI) to provide personal loans, then it must submit a copy of the license for review.

"If you are not directly engaged in money lending activities and are only providing a platform to facilitate money lending by registered Non-Banking Financial Companies (NBFCs) or banks to users, you will need to accurately reflect this in the declaration," it added.

Reportedly, this move has come after last year in 2022, the tech giant was asked by the government of India and RBI to introduce more stringent checks to help curb the use of illegal digital lending applications.