The Enforcement Directorate (ED) has attached ₹86.65 crore lying in bank and payment gateway accounts of various non-banking finance companies (NBFCs) in connection with an instant personal micro-loans fraud case.
Among the companies are Kudos Finance and Investments, Acemoney (India) Limited, Rhino Finance and Pioneer Financial and Management Services and their associated fintech entities.
The ED probe is against the NBFCs that were into instant personal micro-loans business. The agency alleged that various fintech companies backed by Chinese funds had made agreements with the NBFCs for providing loans for terms ranging from seven to 30 days.
The fintech companies that brought in the funds entered into Memorandum of Understanding (MoU) with the “defunct” NBFCs. “Since, the fintech entities were unlikely to get a fresh NBFC licence from the Reserve Bank of India, they devised the MoU route as a via media to do large-scale lending activities. It was projected that the NBFCs had hired fintech companies for customer discovery, but in reality the fintech companies were piggybacking on the licence of the NBFCs and doing large-scale lending business,” said an agency official.
All the decisions related to the fixing of interest rate/processing fee/platform fee and other charges were taken by the fintech companies, which were operating on instructions from people based in China and Hong Kong, it was alleged.
The ED has quantified the proceeds of the alleged crime as over ₹940 crore. Earlier, it had issued a provisional attachment order against Kudos Finance and Investments and its fintech partners for a value of ₹72.32 crore.
