Home / News / India /  ED attaches Rs859 crore proceeds of crime in illegal loan app cases: Govt

NEW DELHI : The Directorate of Enforcement has attached proceeds of crime worth 859.15 crore generated by accused persons/entities through illegal loan apps, Minister of State for Finance Bhagwat Karad said.

Further, assets amounting to 289.28 crore have been seized under the Foreign Exchange Management Act, 1999.

The minister said that the Reserve Bank of India (RBI) has furnished the list of Digital Lending Apps (DLAs) being used by regulated entities of RBI to the Ministry of Electronics & Information Technology (MeitY), which in turn, has shared the list with respective intermediary (App Stores) and requested them to ensure that only the apps figuring in the list are hosted on their app stores.

The Minister further stated that the RBI’s digital lending guidelines issued in September advises measures, including due diligence of Loan Service Providers (LSPs), direct disbursal of loan from bank account of lender to bank account of the borrower without any pass-through/pool or third-party account to avoid layering.

Giving information on addressing the issue of money laundering through illegal loan apps, the Minister stated that the Directorate of Enforcement (ED) has been entrusted to curb money laundering under the provisions of PML Act, 2002. ED has initiated investigation under PMLA in several cases where the proceeds of crime has been generated and acquired by accused persons/entities through illegal loan apps, the Minister stated.

In a written reply to a query in Rajya Sabha, Karad said, “as on date, proceeds of crime of Rs. 2,116 crore (approx) has been identified, out of which proceeds of crime amounting to Rs. 859.15 crore have been attached / seized / freezed under the provisions of PMLA. Further, assets amounting to Rs. 289.28 crores have been seized under section 37A of Foreign Exchange Management Act, 1999."

Giving more information, the Minister stated that the RBI has issued master circular on Know Your Customer (KYC) norms / Anti-Money Laundering (AML) standards/Combating Financing of Terrorism (CFT)/Obligation of banks and financial institutions under Prevention of Money Laundering Act (PMLA), 2002. 

Under this circular, banks and financial institutions have been advised to follow certain customer identification procedure for opening of accounts and monitoring of transactions of suspicious nature to avoid its misuse for money laundering and reporting the same to appropriate authority, the Minister stated.

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