The Directorate of Execution (ED) tied 72.32 crore rupees in various bank accounts and payment gateway accounts of Kudos Finance and Investments Pvt Ltd, an Indian non-bank financial corporation (NBFC) and its various companies. fintech partners in a money laundering case. . The agency attached the amounts under the Prevention of Money Laundering Act 2002 (PMLA).
ED is conducting a money laundering investigation against a number of Indian NBFC companies and their fintech partner mobile applications (APPs) that have been booked by Telangana Police in several FIRs for illegal loans and for using extortion means to collect exorbitant interest rates from their customers. ED’s investigation found that various Indian companies teeming with investment from China and Hong Kong created memoranda of understanding with defunct NBFCs and gave security deposits in the name of “performance guarantees.” “.
NBFCs have opened up separate Merchant Identifiers (MIDs) with payment gateways like Paytm and Razorpay, and have enabled these fintech companies to launch large-scale online lending operations, the ED said. Against guidelines from the Reserve Bank of India (RBI), Indian NBFCs have allowed FinTech companies to license themselves and lend on a large scale on their behalf.
Mobile apps from fintech companies provided instant unsecured personal micro-loans for terms ranging from seven days to 14 days, the ED said, adding that “they deduct 15-25% of the loan at the time of disbursement. itself on behalf of the processing fee “. “The interest rate charged was also sky-high. Their apps would also capture customers’ mobile data by obtaining various access privileges,” the agency said.
In order to get more profits, the ED said fintech companies resort to harsh payback measures through call centers. “Personal data of clients has been misused and calls have been made to friends and relatives of clients and abusive language has been used. Even social media posts have been posted against defaulters to shame them “said the general manager.
Unable to cope with the level of harassment, the ED noted that some people committed suicide. “These apps have managed to have a recovery rate of over 90% and have generated huge profits. The ED said that Kudos Finance and Investment Private Limited is one such NBFC that has entered into memoranda of understanding with 39 FinTech companies and illegally accepted “security deposits” from them and allowed them to do loan activities.
“Although it has no net equity of more than Rs 10 crore, in total violation of RBI guidelines, this NBFC (in fact its partner mobile apps) loaned Rs 2,224 crore in just a few minutes. time. ”With the help of a type extortioner. Call centers collectively generated profits of Rs 544 crore for applications and also earned a commission of Rs 24 crore, ”the ED said.
The agency said these amounts are only illegal proceeds of crime and can be seized by ED. ED has attached available bank balances on their accounts totaling Rs 72.32 crore, the agency said.
Earlier in this case, Pavitra Pradip Walvekar, managing director of Kudos, was arrested on December 17 last year for the offense of money laundering and is in judicial custody. (ANI)
(This story was not edited by Devdiscourse staff and is auto-generated from a syndicated feed.)