The Telangana police have written to the Union Home Ministry to probe the transactions of around 116 applications with Chinese links that offer instant loans to Indians at attractive terms. The Centre has responded to this request and ordered investigation agencies like NIA to look into the matter and sought explanation from Google and other web services who offer these apps.
Many companies registered in Singapore and Hong Kong have been running apps and driving an aggressive campaign on the social media offering instant loans at attractive terms to people in the country. However, some of the kingpins behind these firms are found to be of Chinese origin. They set up offices in India.
For the last few weeks, hundreds of cases have been reported from both the Telugu speaking states–Telangana and Andhra Pradesh–on the alleged malpractices of the organisers of these apps and coercive methods they use for the recovery of loans.
The Cyberabad police commissioner office that looks after parts of Hyderabad city registered around 20 cases since recently.
The aggressive loan marketing by these firms has something to do with the economic distress of people from this year March onwards when the Covid induced lockdowns hit the poor and middle classes. These firms offer loans up to Rs 50,000 without any collateral security or paper work and the money is credited to the applicants bank accounts on the same day.
They just take the Aadhaar card and PAN numbers and of course also the details of the bank account to transfer the money. As there is no paperwork or cumbersome processes, many people in need of money have availed the loans since April this year. According to the police in Hyderabad, the rate of interest is around 18%, but many hidden costs are collected from the borrowers.
For instance, a woman from Malakpet in the city has taken a loan of Rs 10,000 from MyInstant Money App in May, but she got only Rs 8,700 after deducting the process fees and first instalment interest too. She, in her complaint with the police, said that the entire amount was repaid by November first week, but the financiers are insisting that she still owes Rs 7,000.
She is not alone, dozens of others have come to the police and complained that the recovery agents from these apps were using abusive language and threatening them with dire consequences, unless the dues were not cleared immediately. In fact, these instances have come to light after a woman in West Godavari district in Andhra Pradesh committed suicide last fortnight blaming a loan application.
Cyberabad police Commissioner VC Sajjanar this week held a media conference and explained the atrocities committed by these loan recovery agents and termed that their activities were totally illegal and unauthorised. They neither come under banking nor non-banking financial companies. At the best, they may claim as money lenders, but still they need to register themselves with the authorities, he said.
A Chinese person–Jia Chang–is found to be running 11 apps that offer “hassle free instant loans” in many states in the country. The loans delivered to the beneficiaries are traced to Skyline Innovation Technologies, based out of Singapore.
The cyber crimes wing of the police came to know that people in other states like Tamil Nadu, too, have faced harassment from the app agents.
In most cases, the recovery agents who talk in local languages threaten the beneficiaries with consequences and insist that the dues be cleared instantly. Mostly, these apps have targeted people with low incomes and offer a series of loans, if the first ones cleared on time. As the flow of money is easier, some people had availed these loans, though there was need of it. So far, two call centres–based out of Bangalore and Gurgoan–have been traced to be making harassing calls to the receipts of these loans.
The city police have so far arrested 42 persons linked to these apps, and seized bank accounts with Rs 87 crore. Generally, these loans are transferred from virtual accounts which are believed to be located abroad. This is the reason why the police have sought the help of the MHA to unearth the full scope of these apps activities in India.
Definitely, this is a multi-state racket multiple agencies behind it. Whether Chinese financial firms with ulterior motives are behind it is to be investigated by the Centre. Already, the Centre has alerted the NIA on this. The Telangana police have written to Google, seeking ban on 116 loan apps. Google is yet to respond to this, said the cops.
A woman from Malakpet in the city has taken a loan of Rs 10,000 from MyInstant Money App in May, but she got only Rs 8,700 after deducting the process fees and first instalment interest too. She, in her complaint with the police, said that the entire amount was repaid by November first week, but the financiers are insisting that she still owes Rs 7,000.
She is not alone, dozens of others have come to the police and complained that the recovery agents from these apps were using abusive language and threatening them with dire consequences, unless the dues were not cleared immediately.