China-linked instant loan apps on India’s radar, ED attaches assets worth $2.2mn

China-linked instant loan apps have come under intense scrutiny by the Enforcement Directorate (ED), India’s law enforcement and economic intelligence agency, following action by police in Telangana, a southern-central state. The state police had previously registered 118 FIRs under several provisions of IPC, 1860 and Information Technology Act, 2000 against as many as 242 instant loan mobile apps.

ED officials on Thursday (Aug 22) in Hyderabad attached properties worth $2.26 million (₹19 crore) related to these apps in the form of fixed deposits and bank balances.

China connection

Investigations have revealed that many of these apps are linked to a fintech firm having Chinese directors.

For example, apps like ‘Online Loan’, ‘Rupiya Bus’, ‘Flip Cash’, ‘Rupee Smart’ were linked to firms called M/s Nimisha Finance India Private Limited, a Non-Banking Financial Company (NBFC) and M/s Skyline Innovation Technology (India) Private Limited, a fintech company. These firms had Chinese directors whose proceeds of crime were generated using mobile apps.

Debt trap

As per reports, these apps were systematically working to push victims into a vicious cycle of debt trap.

These companies were running several instant loan apps without any valid license from India’s central bank, the Reserve Bank of India. They were charging extremely high interest rates from the borrowers, as well as high processing fees and penal charges.

In some cases, these apps would encourage borrowers to repay the loan by taking a fresh loan from some other app, thus setting a debt trap for poor users.

Harassment

While issuing loans, these apps would register contact details, photos and personal data of the customers/borrowers. In case of non-payment, their representatives would then harass the borrowers, and family members and even send their objectionable pictures to their contacts with obscene remarks.

ED’s investigation is still underway and further action against such fraudulent apps is anticipated.

(With inputs from agencies)

Vikrant Singh

Geopolitical writer at WION, follows Indian foreign policy and world politics, a truth seeker. 

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