ED has supported multiple FIRs registered in Hyderabad, Cyberabad and Rachakonda police stations and booked cases under the Prevention of Money Laundering Act (PMLA) against over 400 mobile apps and 50 NBFCs registered with the RBI.
In its letter to the RBI, the agency detailed the modus operandi of one of the NBFCs, Acemoney (India) Limited, which represented at least 18 mobile apps performing digital lending using their NBFC license.
Since 2019, most Chinese companies entered India for lending business by building fintech apps, but since RBI did not license NBFCs, they entered into agreements with local NBFCs. Most of these fintech apps actually had full control over these NBFCs.
Moreover, after the Center’s restrictions in April 2020 on Chinese FDI, Chinese nationals withdrew from these companies and paid Indians to act as fictitious directors. All of Acemoney’s 18 fintech partners were in the same league, ED said.
“Acemoney (India) Limited was incorporated in 2016 at ROC-Delhi with an authorized capital of Rs 10 crore and a paid up capital of Rs 5.5 crore. There was almost negligible activity but as of June 2020 it experienced exponential growth in lending volume and increased revenue after linking at least 18 lending mobile apps under their NBFC license.Even though according to official records it processed 11,73,520 loan applications, in reality, Acemoney does not lend directly to a single customer,” the ED said in its letter to RBI.
“Acemoney enabled these Chinese companies to make instant micro-loans online using their NBFC license. They deposited funds with Acemoney under the guise of ‘collateral deposit’. NBFC then registered merchant credentials (MIDs) with a payment gateway for each app, then credited the same “security deposit” back into the NBFC MID (actually of the app) The app was then free to use that money to lend So in reality these apps were lending with their own money. But a memorandum of understanding with the apps got them a de facto NBFC license,” the ED said.
“RBI may conduct an investigation and if the above findings are substantiated, then it may take appropriate action against NBFCs such as Acemoney (India) Limited, including cancellation of license,” the ED said. .
