ED attaches Rs 76.67 crore of Chinese loan app funds

They obtained sensitive data of the users which is stored in their mobile phones such as their contacts and photographs.
ED attaches Rs 76.67 crore of Chinese loan app funds

BENGALURU: The Directorate of Enforcement (ED) has issued a provisional attachment order for Rs 76.67 crore lying in various bank accounts and payment gateways of seven Chinese loan app companies and their Indian associates, under the Prevention of Money Laundering Act, 2002 (PMLA). Three of these seven companies are owned by Chinese nationals, the ED stated.

It had initiated an investigation on the basis of various FIRs registered by the CID, Bengaluru, based on complaints received from various customers, who had availed loans and faced harassment from recovery agents of these money-lending companies.

The ED said three of the seven companies are fintech companies. Mad Elephant Network Technology Private Limited, Baryonyx Technology Private Limited and Cloud Atlas Future Technology Private Limited are controlled by Chinese nationals and three NBFCs registered with the Reserve Bank of India (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 the respective NBFCs for disbursement of loans through digital lending apps. The amount attached by ED includes Rs 86.44 lakh, which was charged by Razorpay Software Private Limited as fee for not conducting due diligence in the case of one company enrolled with it for the disbursement and collection of loans,” the ED stated.

The probe revealed that Chinese loan apps offered loans to individuals and levied an usurious rate of interest and processing fees. The loan apps, through their recovery agents, resorted to systematic abuse, harassment and threats through call centres to recover loans. They obtained sensitive data of the users which is stored in their mobile phones such as their contacts and photographs.

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