Hyderabad: The Directorate of Enforcement (ED) has provisionally attached the bank accounts, worth Rs. 105.32 crores, of 12 NBFCs, including Inditrade Fincorp Limited, Aglow Fintrade Private Limited and others and their associated fintech companies.
ED initiated a money laundering investigation on the basis of various FIRs registered by the Hyderabad cyber crime police under various sections of the IPC and the IT Act.
ED has been conducting money laundering investigations against a number of Indian NBFC companies which are in the business of providing instant personal micro loans. It is revealed that various fintech companies backed by Chinese funds have entered into arrangements with these NBFC companies to provide instant personal loans for terms ranging from 7 to 30 days.
How fintech companies used defunct NBFCs
The fintech companies falsely claimed that they were providing technical assistance/customer outreach services to the NBFCs, but in reality, these fintech companies were the actual lenders and controlled the entire lending process. The fintech companies developed their own digital loan app, brought the funds to be lent to the public, signed MoUs with defunct NBFCs for their lending license, and parked the said funds into the NBFCs in the guise of security deposits and performance guarantees. These funds were in turn again returned to the fintech companies in separate MIDs (merchant IDs) opened by the NBFC for the app of the fintech company.
Since the fintech…
