fintech: Loan application case: Ed seizes 72 Cr from finance companies | Hyderabad News

Hyderabad: In loan application cases, the Directorate of Law Enforcement (ED) has issued an Interim Seizure Order under the Prevention of Money Laundering Act (PMLA) fixing 72 crore lying in various bank and payment gateway accounts of Kudos Finance and Investments Private Limited, an Indian non-bank financial company (NBFC) and its fintech partner companies.
ED conducted a money laundering investigation against several Indian NBFCs and their fintech partner mobile apps, which were booked by Telangana police in several FIRs for illegal lending and using extortion means to recover money rates. exorbitant interest from customers.
ED’s investigation had revealed that various Indian companies, which were teeming with investment from China and Hong Kong, had created a memorandum of understanding (MoU) with former NBFCs and made security deposits on behalf of of “performance guarantees”. NBFCs opened separate merchant IDs with payment gateways such as Paytm, Razorpay and enabled these fintech companies to start large-scale online lending operations.
“As per RBI guidelines, India’s NBFCs have enabled fintech companies to piggyback on their license and make large-scale loans on their behalf. Fintech companies’ mobile apps provided instant unsecured personal micro-loans for terms ranging from seven days to 14 days. They used to deduct 15-25% of the loan at the time of disbursement itself in the name of processing fees. The interest rate charged was also exorbitant. Their apps would also capture customers’ mobile data. In order to get more profits, they resorted to harsh stimulus through call centers,” ED alleged.
ED further stated that customers’ personal data was misused, calls were made to friends and relatives, and abusive language was used. Even social media posts have been made against defaulters to shame them. These applications managed to have a recovery rate of over 90% and made huge profits.
Kudos Finance and Investment Private Limited, an NBFC, signed MoUs with 39 fintech companies and illegally accepted “security deposits” from them and allowed them to do lending activities. With the help of extortionist type call centers, they made 544 crore profit for the apps and earned 24 crore commission.

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