HYDERABAD: The Directorate of Enforcement (ED) has provisionally attached assets worth Rs 86.65 crore in connection with the Chinese loan app cases. The attached deposits are lying in 155 bank accounts and payment gateway accounts pertaining to Indian NBFCs Kudos Finance and Investments Private Limited, Acemoney (India) Limited, Rhino Finance Private Limited and Pioneer Financial and Management Services Private Limited and multiple fintech companies associated with them. These companies are allegedly operated by Chinese nationals and have earned over Rs 940 crore by lending through these online loan apps.
The ED had earlier provisionally attached deposits valued at Rs 72.32 crore belonging to Kudos Finance and Investments Private Limited and its fintech partners. So far, the total attachments in this case has reached Rs 158.97 crore, the ED said. The Enforcement Directorate has been carrying out investigations against a number of NBFC companies which are in the business of Instant Personal Micro Loans. It is revealed that these fintech companies backed by Chinese funds struck agreements with these NBFC companies for providing instant personal loans of term ranging from seven to 30 days.
The fintech companies brought the funds to be lent to people, entered an MoU with the defunct NBFCs. Since the fintech companies were unlikely to get a fresh NBFC licence from the RBI, they devised the MoU route with defunct NBFCs to go ahead with large-scale lending activities.
It was projected that the NBFCs had hired the fintech companies for customer discovery, but in reality the fintech companies were piggybacking on the licence of the NBFCs for their lending business. Entire decisions regarding fixation of interest rate, processing fee and platform fee were taken by fintech companies and these companies were operating on the basis of instructions from Chinese and Hong Kong nationals.
MoUs with fintech companies based abroad
The ED found that NBFCs like Kudos Finance, Acemoney, Rhino Finance Pvt Ltd, Pioneer Financial Services Pvt Ltd entered into MoUs with foreign-backed fintech companies to carry out online lending activities in India on a large scale