Govt starts crackdown on Chinese loan app companies in Bengaluru, Gurugram, Hyderabad

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With the impact of the News18 series of investigations into the Chinese loan app scam, involving up to 1,000 illegal businesses operating in India and trapping many needy and innocent people in vicious debt, the government has begun to conduct massive raids and searches in Bengaluru, Hyderabad and Gurugram.

The News18 series highlighted how these companies were illegally registered under one address and their representative was never found at the office premises.

A senior government official told News18 that the Ministry of Commercial Affairs raided companies, including those that helped Chinese people open businesses in India with bogus directors. “They were found to be using coworking spaces to register their businesses. We also received communications from various law enforcement agencies, after which a massive crackdown was launched. Currently, officials have launched actions in Bangalore, Hyderabad and Gurugram,” the government official said.

Sources also confirmed that the Home Office will soon launch a campaign to inform people about fake Chinese loan apps, and is likely to write a letter to all states to take necessary action against them.

The Interior Ministry has already written to central intelligence agencies asking for their opinion on nearly 300 Chinese loan applications.

In its first part of the series, News18 revealed that the Home Office was planning a massive crackdown on these apps and was likely to ban 300 companies from running them.

Additionally, after the impact of the News18 series, the Law Enforcement Directorate (ED) said on September 3 that it had conducted raids on the Bangalore premises of online payment gateways such as Razorpay, Paytm and Cashfree in an ongoing investigation against “illegal” instant smartphones. loans “controlled” by the Chinese. The searches were launched in six premises in the capital of Karnataka, the ED said in a statement.

The search operation is in progress, indicated the Direction of the execution. The federal investigative agency said it seized funds worth 17 crore rupees kept in “trader IDs and bank accounts of these Chinese-controlled entities”, during the raids.

The News18 series focused on how predatory lending by instant loan apps led to a wave of suicides in several states. Despite the arrest of several actors, including Chinese nationals and Indian accomplices, these applications continue to flood the market. They lure desperate individuals into a debt trap and abuse access to their smartphone data to extort exorbitant sums.

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