In an effort to combat the widespread issue of online loan scams targeting unsuspecting consumers, the Securities and Exchange Commission of Pakistan (SECP) has introduced new regulations, tightening the rules for online loan apps.

During a media workshop held in Islamabad, SECP officials revealed measures aimed at protecting consumers from exorbitant interest rates charged by online loan companies. Under the new regulations, these companies are now prohibited from providing loans exceeding Rs. 25,000 to a single user.

To counter predatory lending practices, the companies are restricted from charging customers more than double the loan amount during the repayment process, aiming to shield consumers from exploitative practices prevalent 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 past exploitation, where companies previously charged more than five times the tax on loans.

In a move towards transparency and efficient corporate decision-making, SECP is considering the proposal of conducting electronic voting in general meetings of companies’ shareholders. Additionally, the agency has declared trading through WhatsApp in the name of broker houses as prohibited, with strict legal actions promised against such practices.

To address insider trading, stock markets are now 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.