BB orders payment halt to illegal loan apps

The Bangladesh Bank has instructed banks, mobile financial service (MFS) providers and other payment service providers (PSPs) to immediately suspend payment services to operators of mobile applications involved in unauthorised online lending.
The central bank has also asked the Bangladesh Telecommunication Regulatory Commission (BTRC) and other relevant authorities to remove such applications from online platforms, including the Google Play Store, and take steps to permanently halt their operations.
Bangladesh Bank recently issued separate letters to the authorities concerned, citing provisions of the Payment and Settlement Systems Act, 2024.
According to the central bank, some mobile applications operating online are offering loans at high interest rates, causing financial losses and exposing borrowers to harassment.
The apps may also gain access to users’ phone contacts, personal and sensitive information, photographs, videos and text messages without their knowledge, Bangladesh Bank said.
Borrowers who fail to repay loans may subsequently face blackmail, threats to publish their personal information and photographs on social media, and other forms of harassment, it added.

Citing Section 15(2) of the Payment and Settlement Systems Act, 2024, Bangladesh Bank said no person may operate an online or offline platform involving investment collection, lending, fund custody or financial transactions without approval from the central bank.
As the lending activities of the identified applications are being conducted without Bangladesh Bank’s approval, they are illegal and constitute a punishable offence under Section 37(1) of the law, the regulator said.
The central bank said operators of such applications are directly involved in a punishable offence. 
It warned that scheduled banks, MFS providers, digital financial service providers and PSPs facilitating transactions related to unauthorised lending could also be considered involved in the offence as financial transaction channels.
Citing Section 19(4) of the law, Bangladesh Bank therefore directed all institutions and individuals concerned to immediately stop providing payment services to operators of the identified apps listed in an attachment to its letter.
The regulator also instructed banks to take measures to raise public awareness about the risks associated with unauthorised online lending applications and report the steps taken to its Payment Systems Supervision Department.
Earlier, the Bangladesh Financial Intelligence Unit (BFIU) warned the public against taking loans through unauthorised mobile applications and digital platforms.
The BFIU identified 30 apps allegedly involved in activities including extortion, data theft and financial fraud.
The apps identified by the BFIU include Sathi Loan, Pop Cash, FinCash, Quick Loan, Quick Taka, Dhaka Fin, LoanVibe, Dost Loan, Taka Cash Loan, KWANZA Loan, SSH Money, LoanBuddy, Cash-Hora, Alo Cash, Fast Loan, Easy Taka, Dhorjo Loan, Fin Dot Do, BongoCash, Asha Loan, Subidha Loan, Smart Loan BD, Online Loan BD, City Online Loan, BD Shohoj Loan, Cash Loan, Sonali, Loan Haat and Taka Nao.

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