Google has tightened personal loan policy for apps on Play Store after increased instances of unethical recovery practices by digital lending apps. Google said it will prohibit personal loan apps from accessing sensitive user data such as photos, videos, contacts, precise location, call logs, etc. The updated policy change will come into effect on May 31, 2023.

Google has asked apps to complete the personal loan app declaration for India, and provide necessary documentation to support the declaration. For example, if the firm is licensed by the Reserve Bank of India (RBI) to provide personal loans, they must submit a copy of the licence for review.

"Those who 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, they will need to accurately reflect this in the declaration. In addition, the names of all registered NBFCs and banks must be prominently disclosed in the app’s description," it said.

The tech giant has released a declaration form for lending apps from India, requiring specific disclosures.

"Users must complete this declaration form and submit the necessary documentation before publishing their personal loan app. When the entity is ready to submit the app, they must ensure that app category is correctly set to “Finance” in the Google Play Console, that the developer account name matches the name of the associated registered business name provided through declaration, and that the app is in compliance with all Google Play policies," it said.

Entities should expect the review of their submitted declaration form and app to take at least a week and prepare their app’s launch date accordingly.

Notably, Apple already has in place a data “nutrition label” on its App Store which informs users about what data, if any, is collected by the developers and used for which purpose.

Apple has always had tighter quality controls on its App Store, especially when it comes to user data privacy, and any app or developer that does not adhere to its rules is removed from the App Store. The user only has to go to app’s home page, scroll down and see what data will be collected. Besides, even after installation, users have the option of allowing/denying/revoking access to apps where it comes to sensitive information, including location data, contacts, and pictures.