ED attaches funds Rs.72 Cr
Chinese instant loan app case: Kudos Finance & Investments accounts tied up for illegal lending and money laundering
The Execution Directorate (OF) attached funds from more than Rs.72 crore of a non-bank financial company (NBFC) as part of a money laundering investigation against mobile phone app-based lending companies that were “full of investment” from China and Hong Kong, the agency said on Wednesday. The agency said an interim order had been issued under the Prevention of Money Laundering Act (PMLA) to seize funds of Rs.72,32,42,045 from bank accounts and accounts. payment gateway Congratulations Finance and Investments Private Limitedan Indian company NBFC, and its
The action relates to an ED investigation against “a number of Indian NBFC companies and their fintech partner mobile apps (apps) which have been booked by Telangana Police in several FIRs for illegal lending and for using means of extortion to recover exorbitant interest rates from their clients. The ED investigation revealed that various ‘investment-filled’ Indian companies from China and Hong Kong created MoUs with defunct NBFCs and gave security deposits on behalf of ‘performance guarantees‘.
“NBFCs have opened distinct merchant identifiers with payment gateways like Paytm, Razorpay, etc. and enabled these fintech companies to start large-scale online lending operations. Contrary to RBI guidelines, India’s NBFCs allowed fintech companies to piggyback on their license and make large-scale loans on their behalf,” ED said in a statement. Mobile apps from fintech companies gave ‘insecure’ instant personal micro loans for terms ranging from 7-14 daysadds the agency.
“They used to deduct 15-25% of the loan at the time of disbursement itself on behalf of Processing fee. The interest rate charged was also exorbitant. Their apps would also capture customers’ mobile data by gaining various access privileges etc. “, said the ED, adding that these companies resort to”difficult recoverymethods, which forced some defaulting debtors to commit suicide.
The agency said that “clients’ personal data was misused and calls were made to clients’ friends and relatives and abusive language was used.” “Even the social media posts were made against the failing to shame their. Unable to bear the level of harassment, some people took their own lives,” the anti-money laundering agency said. These applications managed to have a recovery rate of over 90% and made huge profits, the ED said.
The accused NBFC – Kudos Finance and Investment Private Limited – is one such NBFC company which had entered into memorandums of understanding with 39 fintech companies and illegally accepted “security deposits” from them and allowed them to do the lending business. “Despite not having net equity of more than Rs.10 crorein complete violation of RBI guidelines, this NBFC (actually its partner mobile apps) lent Rs 2,224 crore in a short time.
“With the help of extortionist-style call centers, collectively they profits generated of Rs.544 crore for apps and also earned a commission of Rs.24 crore,” the polling firm said. The agency in December 2020, arrested the promoter, director and chief executive officer (CEO) of this NBFC, Pavitra Pradip Walvekar.
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