With the rising acrimony between India and China due to tensions at the border, as well as the general notion of distrusting the Chinese that has been emerging in governments around the world, the Union government has put a host of money lending fintech organizations on a watch list with suspected ties to the Chinese government. The seriousness of the issue may even lead to a potential ban, which is definitely on the cards, LiveMint suggests.
Recent developments have had significant questions being asked on the grounds of national security, both by the Indian and American governments, regarding apps with ties to China (that’s what the entire TikTok fiasco is), jeopardising user data to aid the Chinese government. These questions have seen a list of 177 China-based apps including the hugely popular PubG Mobile and TikTok get handed a ban from operating in India.
But with the growing severity of privacy concerns, the Indian government has now turned its focus on to fintech organizations with direct links to China, in an attempt to check for a potential data breach.
Individuals close to the proceedings have pointed out that the Government is looking at data leaks from fintech corps, for a breach in a much more severe proportion than those from social networking apps. This is because fintech apps usually have the user disclose critical information to them before the procedure can even begin, including bank details, aadhar card details, and income tax data. Hence, leaking of such delicate information would be catastrophic.
A recent search has shown that many fintech apps and organizations operating within the country have direct links to Chinese officials and have Chinese nationals as their company directors. This particular piece of information in these tumultuous political times have rung the danger bells in Delhi. The government is trying to figure out measures to clamp down on potential security breaches from the financial tech sphere to secure both the user’s privacy and also safeguard national security. However, the business model of the lending apps makes it difficult for a centralized body to regulate them as the Reserve Bank of India has no jurisdiction over their operations, as there is no public deposit being involved in the transaction process.
Significant accusations have been made against said lending apps in recent times, with users criticizing their recovery techniques and operation policies. And with a potential data leak on our hands, if found guilty, the union government is all set to take necessary actions against said fintech organizations, with a ban from operations within the country very much on the cards.