Important, but inadequate

The Ministry of Electronics and Information Technology (MeitY), on the recommendation of the Ministry of Home Affairs, initiated a ban on 230 Chinese apps — 138 betting apps and 94 loan-lending apps — on an ‘urgent’ and ‘emergency’ basis. This step is seen by many as a continuation of India’s ‘digital strike’ — a term coined by one of India’s Union ministers when India first banned 59 Chinese apps in June 2021 against the backdrop of border skirmishes with China. The motivation for the recent ban, however, is slightly different and more pertinent; though the grounds cited are somewhat similar. The 2021 ban included names like Tik Tok, UC Browser and ShareIt that stood out in terms of popularity — enjoying over 100 million monthly active users. The intent, apparently, was to punish China for its cross-border indiscipline. It is another matter that the apps were also alleged for “stealing and surreptitiously transmitting users’ data in an unauthorised manner to servers which have locations outside India”, thus violating the sovereignty and integrity of India”. In a similar vein, the most recently banned apps have been considered to be “prejudicial to the sovereignty and integrity of India, defense of India, security of the state and public order.” But the motivation for the ban is more real this time around. It has come on the basis of multiple public complaints of illegitimate extortion and harassment of individuals who had availed small loans through mobile apps. Allegations are that some of those entities have been misusing illegally collected personal data and morphed content to blackmail those who have taken loans. It has to be admitted that it is a real problem facing many Indian citizens. Due to lack of awareness and access problems in availing loans through formal credit methods, people normally fall prey to predatory loan-lending entities on the Internet. The government is right on the money in imposing a crackdown on the allegedly malicious mobile applications. Such issues indeed need to be dealt with an iron hand. However, by doing so, the government can solve only a part of the problem. It is not difficult to imagine the reason behind the popularity of such apps, particularly the loan-lending apps. Popularity of such apps exposes a loophole in India’s formal credit system, even if it has been simplified significantly in recent years. For a long time, farmers and other village and semi-urban folks have been exploited by informal money lenders. Now, with the booming of the Internet, a similar trend has been observed among semi-literate and unaware masses across geographies and demographics. The need of the hour is to ensure two-fold awareness among masses — about the hazards of the illegitimate loan-lending entities, and the positive alternatives available in the formal credit sector. Unless and until the crackdown on loan-lending apps is accompanied by comprehensive widening of the formal credit system, the success on this front will remain elusive. This is perhaps the right time to revamp and strengthen the formal credit system, as the penetration of the Internet is on its way to reach the last mile in the remotest corner of the country — down to the most illiterate, unaware and vulnerable ones. In fact, strengthening and popularising the formal credit system is a more viable option when compared to imposing a crackdown on illegitimate apps. The reason behind this argument is centered around the efficacy of the ban measures. In an age of VPNs, it is very difficult to implement such bans in full measure. It is also evidently clear that a large number of the banned applications are available through third-party platforms, rather than on Google’s Play Store or other stores. As such, their re-routing, or even the creation of new similar apps takes things back to square one. There is a limit to which the government can keep on banning foreign apps. In comparison, the app developing ecosystem has become much more prolific and robust. Apart from making moves that are largely symbolic and attract public glare, there is a need to make an insidious attack on malicious entities by looking at comprehensive solutions.