ED crackdown on Chinese loan apps, attaches Rs 76.67 crore of 7 companies

Bengaluru: Enforcement Directorate (ED) has hooked up Rs 76.67 crore mendacity in numerous financial institution accounts and fee gateways pertaining to Chinese loan app companies and their Indian associates.

The provisional attachment order was issued beneath the Prevention of Money Laundering Act, 2002 (PMLA).

The company initiated an investigation on the premise of numerous FIRs registered by CID, Bengaluru on the complaints obtained from numerous prospects who had availed loan and confronted harassment from the restoration brokers of the cash lending companies.

The quantity hooked up by ED pertains to seven companies out of which three are Fintech companies particularly Mad Elephant Network Technology Private Limited, Baryonyx Technology Private Limited and Cloud Atlas Future Technology Private Limited that are managed by the Chinese nationals and three NBFCs registered with RBI particularly X10 Financial Services Private Limited, Track Fin-ed Private Limited and JamnadasMorarjee Finance Private Limited.

The Fintech companies have an settlement with respective NBFCs for disbursement of loans by means of digital lending apps.

The quantity hooked up by ED additionally contains the quantity of charge charged by Razorpay Software Private Limited to the extent of Rs 86.44 lakhs for not conducting due diligence in case of one firm enrolled with it for disbursement and assortment of loans. 

Money laundering investigation by ED revealed that these Chinese loan apps supplied loans to people and levied a usurious price of curiosity and processing charges.

The loan apps by means of their restoration brokers resorted to systematic abuse, harassment and threatening to the defaulters by means of the decision facilities for coercive restoration of the loans by acquiring delicate information of the person saved on cellular reminiscent of contacts, images and utilizing them to defame or blackmail to the borrower.

They even threatened the debtors by sending pretend authorized notices to their family members and members of the family.

The investigation additional revealed these companies usually are not licensed beneath any legislation and the NBFCs knowingly let these fintech companies to make use of their names for the sake of getting fee. The similar can be violation of the Fair Practices Code of RBI.

Also Read: ED information prosecution criticism towards three individuals in cash laundering case in Goa