The Securities and Exchange Commission of Pakistan has banned 120 loan apps in the country to save people from falling into "debt traps," Aaj News reported on Wednesday.

According to a statement from the SECP, the apps were prohibited after consultation with the Pakistan Telecommunication Authority, Google, and Apple.

Loan applications, according to SECP, have sparked worries about "data privacy violations, and coercive recovery practices."

The statement further stated that the Federal Investigation Agency was taking action against the banned apps after being made aware of them through surveillance and complaints.

Additionally, it stated that under Google's new "Personal Loan App Policy," only SECP-approved apps will be permitted to operate in the country.

After a father of two children committed suicide because he was unable to repay a debt, the issue of loan app entrapment came to light.

Authorities acted after further reporting indicated widespread misconduct, including harassment and misdeclaration of terms by the apps.

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