The government should have talked to RBI before banning lenders

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Editor's note: Earlier this month, India’s fintech industry had a taste of the government’s heavy-handed approach towards perceived adversities. On 5 February, the Ministry of Electronics and Information Technology, on the recommendation of the Ministry of Home Affairs, moved to block 138 betting apps and 94 loan apps under Section 69A of the Information Technology Act, 2000.     The move was reportedly triggered by concerns over possible Chinese links of some of these apps, suspected money laundering activities, users’ data security and non-compliance with digital lending laws. In the process, loan apps run by several non-banking financial companies regulated by the Reserve Bank of India also found themselves on the list. PayU’s LazyPay, Faircent, Kissht and IndiaBulls Home Loans saw their websites blocked right away. Others such as KreditBee, mPokket and TrueBalance were ordered to be taken down from app stores. In the subsequent days, senior executives from some of these firms were summoned by the government and asked to submit documents about their businesses’ shareholding patterns, data security measures and other compliance-related matters (the sequence of events was described in a story …