Is Your Easy Loan App Banned? Here's What You Should Do Now

The Ministry of Electronics and Information Technology (MeitY), on Feb 06, 2023, instructed a large number of FinTech companies in the digital lending industry to shut down their websites and discontinue their operations. MeitY imposed the ban based on an emergency order issued by a nodal officer of the home ministry. These apps were allegedly operated by overseas entities, particularly Chinese, and involved in unauthorised digital lending, betting, and gambling.

The three well-known FinTech apps, LazyPay, Indiabulls Home Loans, and Kissht, were among the 232 blocked apps, out of which 94 were digital lending platforms (Buy Now Pay Later; BNPL) and 138 betting and gambling apps. However, last Friday, Feb 10, 2023, the IT ministry lifted its ban on some of the companies, including LazyPay and Kissht. The move comes after some of the affected FinTech startups submitted evidence of their ownership structure to the government. The government has clarified that it has banned only those digital lenders which have flouted the lending norms.

According to a report by Mint, 15 major companies met with officials from the MeitY in Delhi. The companies were given 30-minute slots for presentations to the individuals and groups. The Reserve Bank of India (RBI) sent a list to the government stating that many of these apps work with regulated entities and are legal. The government wanted to gather information about the source of funding (VC backing), the type of customers served, and where the data is stored.

However, many Easy Loan apps are still banned. If you have availed of a loan from any digital lender, you can check whether your lender is banned by visiting their official website. The banned websites show the message "The website has been blocked as per the order of the Ministry of Electronics and Information Technology under the IT Act, 2000".

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If you have availed of a loan from any of the banned Easy Loan apps, here's what you can do:

It is important to understand that the ban on a particular app is a decision taken by the government for national security or privacy concerns or to prevent financial fraud and money laundering. As a borrower, you may have limited options as there is no official communication from the government about how the existing borrowers can proceed with their repayments or any other pending services, but it is best to stay informed and follow the official guidelines.

1. Check the official sources:

If you think your digital lending app is a part of the banned apps, it is important to verify the information through official sources such as government websites and press releases. These sources are reliable and provide accurate information so that you can confirm if the app you are using is indeed banned.

2. Look for alternative apps:

You can find alternative options to continue accessing the services you need. One option is to look for alternative apps that offer similar services. This could include apps from other companies or in a different category that can meet your needs. You can search online for alternative apps and compare the features, security, and user reviews to find one that best suits your needs. Before downloading any new app, make sure to research the app and its privacy policies to ensure that it is trustworthy and secure.

3. Reach out to the existing lender:

If you have an ongoing loan or any other pending transactions with the banned app, reaching out to the lender can be a helpful next step. They can provide you with the right information on how to proceed with your transactions. They may also have alternative solutions or services that they can offer to help you complete your transactions or access the services you need. You can reach out to them via support channels, such as a helpline number, email, or social media. When reaching out, it's important to provide clear and concise information about your situation and needs. Be sure to keep a record of your communication with the lender for future reference.

4. Seek legal advice:

If you feel that the ban on a lending app has affected your rights or financial interests, seeking legal advice is necessary. A lawyer can help you understand your rights, provide guidance on the best course of action to take, and represent you in legal proceedings, if required. It's important to choose a lawyer who has experience in the relevant area of law, such as consumer protection or financial services. When seeking legal advice, be prepared to provide information about your situation and the details of the ban. Keep in mind that legal proceedings can be time-consuming and costly, so make sure you carefully consider your options before taking any legal action.

In conclusion, if your lender's app is banned by the government, it is important to be extra careful when following any instructions. Recheck if the information and guidelines are provided by official sources. If you have not received any official communication, it is advisable to wait until you get clear instructions from the government. Most importantly, do not make any payments or share your personal and/or financial information with any unknown party in a hurry.

KETKI JADHAV is a Content Writer at PersonalFN since August 2021. She is an MBA (Finance) and has over seven years of experience in Retail Banking. Ketki specialises in covering articles around banking, insurance, personal finance, and mutual funds and has been doing it for over three years now.