The Crime Branch has opened a prefatory investigation into the workings of increasingly popular mobile phone applications that extend loans and cash advances to subscribers without much collateral or red-tape.
S. Sreejith, Additional Director General of Police, Crime Branch, told The Hindu that the inquiry would determine whether such impromptu financing land citizens in extortionate debt traps, rendering borrowers vulnerable to intimidation and suicide.
The Crime Branch would also probe whether the attractively packaged mobile phone-based loan schemes had Reserve Bank of India (RBI) sanction.
Mr. Sreejith said so far the police have not stumbled upon any criminality. However, the agency would investigate whether the digital financial operations violated the law. The CB has sought information from police stations across Kerala on money lending-related crimes and unnatural deaths.
SPC directive
State Police Chief (SPC) Loknath Behera had ordered the probe based on reports that the law enforcement in Telengana had busted a racket that threatened borrowers who defaulted payment. The police learnt from their counterparts that the “mobile phone loan application” racketeers stole the personal information stored on the mobile phones of debtors and used the data to blackmail, vilify or harass them into repaying loans.
The suspects also created WhatsApp groups of borrowers. They used the groups to threaten and shame them into meeting the conditions of their mortgage. The police said women were victims of the racket in several States. Many borrowers seemed unable to escape the vicious debt cycle and had attempted suicide. However, Kerala has not reported any such incident so far.
Mr. Behera has asked the CB to get more information about the racket from other State law enforcement and the Interpol.
He has asked the agency to use the High-Tech Cyber Inquiry Cell services to gauge the penetration of mobile phone application-based advance-pay and loan services in Kerala.
Another official said offshore investors beyond the pale of the country’s law appeared to control the operations. However, the police could book their local agents if found guilty of charging excessive interest or using high-handed methods to recover loans.
He said the COVID-19-impelled salary cuts and loss of wages had compelled a sizeable section of white-collar workers to seek cash advances. Many could have fallen prey to the online racketeers. The CB probe would shed more light on the matter.
