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ED Assets Fintech Companies Operating Chinese National Law Enforcement Directorate PMLA NBFC Personal Loans

New Delhi: The Law Enforcement Directorate claimed on Wednesday that it tied Rs 86.65 crore lying in various bank accounts and payment gateway accounts belonging to NBFCs under the Money Laundering Prevention Act. silver (PMLA). The ED said on Wednesday that these companies were acting at the request of some Chinese and Hong Kongers. In its investigation of the money laundering case, the ED discovered that they had entered into the business of illegally granting instant loans with certain National Non-Banking Financial Companies (NBFCs).

“It has been revealed that various fintech companies backed by Chinese funds have entered into agreements with these NBFCs to provide instant personal loans with terms ranging from seven to 30 days. signed memorandums of understanding with the defunct NBFC for their loan license.

“Since fintech companies were unlikely to get a new NBFC license from the RBI, they devised the MOU route with old NBFCs as a medium to conduct large-scale lending activities. It was planned that NBFCs hired the fintech companies for customer discovery, but in reality, the fintech companies relied on the license of NBFCs and engaged in large-scale lending activities” , said an ED official.

He said that all decisions regarding interest rate setting, processing fees, platform fees, etc. had been taken by fintech organizations working on the instructions of people located in China and Hong Kong.

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NBFC companies, particularly Kudos, Acemoney, Rhino and Pioneer, have entered into MoUs with foreign-backed fintech companies to conduct online lending business in India.

An amount of Rs 940,46,39,498 was deemed as continuing wrongdoing as the equivalent was obtained through predatory lending activities breaching RBI rules. The ED singled out bank balances of Rs 86.65 crore in 155 bank accounts and the same was attached under the provisions of the PMLA to save the proceeds of crime. Further investigation into the fund trail is ongoing.

Previously, a PAO was issued against Kudos Finance and Investments Private Limited and its fintech partners worth Rs 72.32 crore.

(With PTI inputs)

Cory E. Barnes

The author Cory E. Barnes