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Opposition party Congress accuses Chinese loan apps of taking away INR 500 Cr from Indian loan borrowers and leaving them stranded as well as in debt. 

According to a PTI report, Congress also denounced the Central government (Modi-led government) for not having a strategy to tackle with such fraudulent loan apps.

The comment has been made following the anti-money laundering body Enforcement Directorate (ED) revealed that over INR 800 Cr has been taken away by 365 loan apps and associated NBFCs from the native loan seekers.

During the probe, the ED found out that over INR 4,000 Cr were disbursed by fintech loan apps as credit. Meanwhile, over INR 700 Cr were collected as processing fees and INR 85 Cr were recovered as interest and penalties by the loan apps. 

Recently, The Institute of Chartered Accountants of India (ICAI) was also reported that it is presently looking for various CAs which have aided Chinese loan apps in establishing themselves in India.

It was further informed that some CAs have inked documents of these dubious loan apps without carrying out due diligence at their end. 

Earlier this month, India’s Finance Minister Nirmala Sitharaman addressed the Rajya Sabha stating that the Centre would take action against loan apps that are established outside India. Besides, the Centre would also take action against Indian natives who assisted these apps to deepen their roots in the country.

She also informed that various departments of the government including the Ministry of Finance, Corporate Affairs and the Ministry of Electronics and Information Technology, among others are concertedly discussing and planning a course of action to deal with such loan apps. 

Meanwhile, from January 2022 until now, tech giant Google has taken down more than 2000 loan apps from the country’s play store owing to numerous reasons such as showcasing misinformation, violating norms and having questionable behaviour, among others. 

Besides, Google also stated that it was planning to frame stricter policies to keep a check on such loan apps. 

Apart from Chinese loan apps, Chinese companies, whose subsidiaries are operating in India, are also under the Indian government’s scrutiny. Over the past two years, numerous Chinese companies such as Huawei, Vivo, Xiaomi, and Oppo, among others have been investigated by regulatory authorities and further, accused of anti-money laundering as well as tax evasion cases. 

At the beginning of August, reports were making rounds that the Centre was contemplating to prohibit the Chinese smartphone makers from selling cell phones below INR 12K in an attempt to oust them from the country’s low-end mobile market. 

However, MoS for Electronics and Information Technology Rajeev Chandrasekhar today (30th August) cleared the air saying that the Centre is not planning to restrict Chinese smartphone makers to sell cell phones below INR 12K. 

He further informed that the Indian smartphone makers have enough room in the country’s mobile phone market thus, denying the exclusion of Chinese smartphone players.