In a bid to address the rampant issue of online loan scams preying on unsuspecting consumers, the Securities and Exchange Commission of Pakistan (SECP) has introduced new regulations, tightening the rules for online loan apps.
At a media workshop held in Islamabad on Tuesday, SECP officials unveiled measures to protect consumers from exorbitant interest rates charged by online loan companies. Under the new regulations, these companies are now restricted from providing loans exceeding Rs. 25,000 to a single user.
While, in a move to counter predatory lending practices, companies are prohibited from charging customers more than double the loan amount during the repayment process. This measure aims to shield consumers from the exploitative practices that were widespread in the industry.
Borrowing limits and consumer safeguards
According to SECP, a customer is now limited to borrowing up to Rs. 75,000 simultaneously from three different lenders. This step is a direct response to prior exploitation, with companies previously charging more than five times the tax on loans.
In a further push for transparency and efficient corporate decision-making, SECP is considering the proposal of conducting electronic voting in general meetings of companies’ shareholders. Simultaneously, the agency has declared trading through WhatsApp in the name of broker houses as prohibited, with strict legal actions promised against such practices.
To tackle insider trading, stock markets are now being equipped with call-recording capabilities. Acknowledging the challenges of proving such cases in court, SECP officials have expressed their commitment to investigating and penalizing offenses related to insider trading.
