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ED attaches assets worth Rs 76 crore in Chinese loan app scam

The Enforcement Directorate (ED) has attached money to the tune of Rs 76.67 crore, lying in various bank accounts and payment gateways, in connection with Chinese loan application companies and their Indian associates, officials said.

The amount attached by ED pertains to seven companies, out of which three are fintech companies — Mad Elephant Network Technology Private Limited, Baryonyx Technology Private Limited and Cloud Atlas Future Technology Private Limited — which are controlled by the Chinese nationals and three NBFCs (Non-Banking Financial Company) registered with RBI namely X10 Financial Services Private Limited, Track Fin-ed Private Limited and Jamnadas Morarjee Finance Private Limited.

“The fintech companies have an agreement with respective NBFCs for the disbursement of loans through digital lending apps. The amount attached by ED also includes the amount of fee charged by Razorpay Software Private Limited to the extent of Rs 86.44 lakh for not conducting due diligence in case of one company enrolled with it for disbursement and collection of loans,” said the ED.

ED claims that these Chinese loan apps offered loans to individuals and levied usurious rates of interest and processing fees. Later, the loan apps through their recovery agents allegedly resorted to systematic abuse, harassment and threatening of the defaulters through the call centres for coercive recovery of the loans by obtaining sensitive data of the user stored on mobile such as contacts, photographs and using them to defame or blackmail the borrower.

“They even threatened the borrowers by sending fake legal notices to their relatives and family members. The investigation further revealed that the money lending business has been indeed being run by these fintech companies for which they are not authorized to do under any law and these NBFCs knowingly let these fintech companies use their names for the sake of getting commission without being careful about the conduct of these fintech companies in dealing with the customers who are vulnerable section of the society and are in dire need of funds due to the prevailing pandemic situation. The same is also a violation of the Fair Practices Code of RBI,” added the ED

The ED had initiated its investigation on the basis of various FIRs registered by Bengaluru Police’s Criminal Investigative Department (CID) based on the complaints received from various customers, who had availed a loan and faced harassment from the recovery agent of these money lending companies. India News

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