Telangana loan app scam: ED files prosecution complaint

Hyderabad: Enforcement Directorate (ED), Hyderabad Zonal Office has filed a Prosecution Complaint (PC) against several NBFCs, Fintech companies and individuals involved in instant loan lending business through various mobile applications before a local court in Nampally.

Earlier ED initiated investigation on the basis of 43 FIRs registered in 2020-21 by the Cyber Crime Police Station, Cyberabad and Rachakonda in Telangana State against various mobile applications and mobile numbers associated with various Fintech companies and NBFCs.

Anti money laundering agency probe revealed that various Fintech companies used their funds and entered into agreements with defunct / dormant / non-performing NBFCs to indulge in short term lending at exorbitant rates and by charging very high processing fees through mobile applications.

Further ED investigation revealed that the mobile loan apps, while sanctioning loans, took access to private data of the borrowers such as images, messages and contact details. This data was then misused to coerce the borrowers to repay the loans. “The borrowers were also offered loans at higher interest rates through other related loan apps to repay their existing loans which resulted in the borrowers falling in debt traps. Harassment and extortion compelled several borrowers to commit suicide,” said ED in an official statement.
ED attaches properties worth crores

ED had earlier issued five Provisional Attachment Orders attaching properties of various Fintech companies and NBFCs worth Rs. 346.86 Crore. Further, Proceeds of Crime (POC) worth Rs. 434 Crore approx. in the form of bank account balances were put under freeze during search operations conducted in the case. These attachments and freezing orders have been confirmed by the Adjudicating Authority, PMLA.
Further investigation is under progress.

Directorate of Enforcement (ED) filed a Prosecution Complaint (PC) before the Special MSJ Court, Nampally, Hyderabad under the provisions of Prevention of Money Laundering Act (PMLA), 2002 and the Court took cognizance of the PC on Thursday.