edi attaches funds of non-banking financial company with investment from china


New Delhi, Jan 12 (PTI) The Enforcement Directorate (ED) has attached Rs 72 crore corpus of a non-banking financial company (NBFC) in a money laundering probe against the instant lending app. The probe was against companies giving loans through mobile phone apps. A large amount of investment has been made in these companies from China and Hong Kong.

The probe agency on Wednesday said it has attached Rs 72,32,42,045 under the Prevention of Money Laundering Act (PMLA). The fund is funded by Indian NBFC company Kudos Finance and Investment Pvt Ltd. and was lying in the bank accounts and payment gateway accounts of fintech partners.

The action is related to ED’s ongoing probe against several Indian NBFC companies and fintech partner mobile applications (apps). The Telangana Police has registered several FIRs against them for illegally giving loans, exorbitant interest on it and then the modalities of extortion.

ED’s investigation found that there have been huge investments from China and Hong Kong in many Indian companies. For this, MoUs were signed with NBFCs lying idle and ‘Security’ amount was deposited in the name of performance guarantee.

According to the probe agency, “NBFCs opened separate merchant IDs with payment gateways like Paytm, Razorpay etc and allowed these fintech companies to start fully online lending operations.”

The ED alleged, “Contrary to the RBI guidelines, Indian NBFCs have permitted financial technology (fintech) companies to undertake lending activities solely on their licenses.”

Mobile apps of fintech companies used to give instant loans of small amounts for seven to 14 days.

These companies used to deduct 15 to 25 percent of the loan amount in the name of processing fee. In addition, the interest rate on it was also high. Not only this, their mobile apps also used to access the mobile data of the customers. In order to get more profit, they also used forced methods for recovery of loans.

The accused NBFC… Kudos Finance & Investment Pvt Ltd… is one of the non-banking financial company which had tied up with 39 fintech companies. Illegally accepted ‘Security’ deposits from them and allowed them to start lending.

According to the ED, this NBFC (actually its partner mobile app) disbursed loans worth Rs 2,224 crore in a short span of time, in violation of RBI guidelines, even though it did not have a net corpus of more than Rs 10 crore.

The agency had arrested Pavitra Pradeep Walvekar, the promoter, director and chief executive officer of the NBFC, in December last year.