Bengaluru: Enforcement Directorate (ED) has attached Rs 76.67 crore lying in various bank accounts and payment gateways pertaining to Chinese loan app companies and their Indian associates.
The provisional attachment order was issued under the Prevention of Money Laundering Act, 2002 (PMLA).
The agency initiated an investigation on the basis of various FIRs registered by CID, Bengaluru on the complaints received from various customers who had availed loan and faced harassment from the recovery agents of the money lending companies.
The amount attached by ED pertains to seven companies out of which three are Fintech companies namely 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 registered with RBI namely X10 Financial Services Private Limited, Track Fin-ed Private Limited and JamnadasMorarjee Finance Private Limited.
The Fintech companies have an agreement with respective NBFCs for 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 lakhs for not conducting due diligence in case of one company enrolled with it for disbursement and collection of loans.
Money laundering investigation by ED revealed that these Chinese loan apps offered loans to individuals and levied a usurious rate of interest and processing fees.
The loan apps through their recovery agents resorted to systematic abuse, harassment and threatening to the defaulters through the call centers 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 to the borrower.
They even threatened the borrowers by sending fake legal notices to their relatives and family members.
The investigation further revealed these companies are not authorized under any law and the NBFCs knowingly let these fintech companies to use their names for the sake of getting commission. The same is also violation of the Fair Practices Code of RBI.