Chinese loan application case: ED attaches 76.67 crore

The Enforcement Directorate (ED) has tied ₹ 76.67 crore in various bank accounts and payment gateways relating to the Chinese loan enforcement case. Chinese companies and their Indian associates are questioned for granting loans at exorbitant interest rates compared to RBI guidelines. The investigation was initiated under the provisions of the Prevention of Money Laundering Act 2002 (PMLA).

The amount tied by ED is for seven companies, three of which are financial technology companies – Mad Elephant Network Technology Private Limited, Baryonyx Technology Private Limited and Cloud Atlas Future Technology Private Limited which are controlled by Chinese nationals.

Three are non-bank financial companies registered with the RBI: X10 Financial Services Private Limited, Track Fin-ed Private Limited and Jamnadas Morarjee Finance Private Limited.

According to an official statement, the financial technology companies have an agreement with the respective NBFCs for the disbursement of loans through digital lending applications.

The amount attached by the ED also includes the amount of fees charged by Razorpay Software Private Limited to the extent of 86.44 lakhs for failing to perform due diligence in the case of a company registered with it for disbursement and loan recovery, the ED said in a press release.

Loan applications through their debt collectors have resorted to systematic abuse and harassment of defaulters through call centers for coercive loan collection. According to the ED, they obtained sensitive user data stored on mobile such as contacts, photographs and used them to defame or blackmail them. The companies have even reportedly threatened borrowers by sending bogus legal notices to relatives and family members.

Further investigation is underway.

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