CID, ED Asks Paytm, RazorPay To Stop Supporting Chinese Loan Apps; Investigation Starts Against Them

ED and CID to investigate dubious Chinese fintech entities and instructs payment gateways to stop their transactions with such firms.
ED and CID to investigate dubious Chinese fintech entities and instructs payment gateways to stop their transactions with such firms.

The whole pandemic period has been a difficult time for everyone around the globe, not just mentally but financially as well.

Millions of people have lost their jobs and livelihoods, without any financial support for their families. Amidst such times, there have been reports of Chinese fintech firms in India, lending money at very reasonable rates and policies, thereby duping many of their fortunes.

Cases have come in where victims have commited suicide due to loss of all their money to such dubious Chinese fintech entities.

With an increasing number of such online fraud cases, the Enforcement Directorate (ED) and Criminal Investigation Departments (CID) of various states have decided to launch thorough investigations on more than 2 dozen Chinese lending firms.

Consequently, they have also instructed payment gateways like Razorpay to put an immediate stop on processing the transactions of such companies.

ED and CID into Investigations

In order to put a stop on the ongoing data compromise by dubious Chinese fintech entities, like personal loan applications, the ED and CIDs of different states have come together and reported to launch a thorough check and investigation against over 2 dozen Chinese lending cos.

They have also instructed payment gateways to put a stop on processing payments and transactions of such dubious Chinese fintech firms, along with cutting their ties and dealings with such companies.

According to ET

“ED and several state CIDs have issued notices to payment gateways to cancel the accounts of several Chinese-backed fintech entities. These companies are also being questioned about the reasons behind opening accounts for such dubious firms.”

Money Trail to be Found Through KYC Ex

It has been reported that due to the mistake made by payment gateways to hurriedly open accounts for such Chinese entities so that an increasing cash flow could be generated, the money trail will now have to be exercised through KYC details.

To this, payment gateway Razorpay replied,

 “As a financial services business, we proactively block and report any suspicious merchants to the law authorities and help them with KYC and other details to assist law enforcement. 

There has been no action or investigation against Razorpay in this regard. Razorpay has already banned 300-400 apps in the last three months.”

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