Hyderabad Police have frozen 75 bank accounts holding Rs 423 crore in connection with a multi-crore money lending scam - that charged victims up to 35 per cent interest - conducted via 30 mobile phone apps that were not approved by the Reserve Bank of India (RBI).
Police in Telangana were alerted once three people died by suicide after reportedly being harassed and humiliated by money lenders. Authorities conducted multiple raids in Hyderabad and Gurgaon in Haryana, and arrested 16 individuals.
Cyberabad police are carrying out independent investigations and have arrested seven, including an engineer with a degree from the United States. Sarath Chandra, 32, ran money-lending operations via two companies - Onion Credit Pvt Ltd and Cred Fox Technologies, which were started in 2018-19. He also developed and sold loan apps to companies in Bengaluru.
The business operated through firms registered at Bengaluru in January and February this year, as well as call centres in Gurgaon and Hyderabad.
Officials say the call centres employed hundreds of youngsters trained to lure customers, entrap them into borrowing successive sums from multiple apps, and were trained to "abuse, defame and blackmail" victims in order to recover borrowed money and the interest.
Call centres connected to the scam were set up in Gurgaon, Bengaluru and Hyderabad
In three call centres alone over 1,000 people were employed, many of whom were college graduates paid between Rs 10,000 and Rs 15,000 per month.
The scale of the fraud, made more tragic by running at a time when tens of thousands have been left jobless and in dire financial straits because of the pandemic, was highlighted after links to China - a woman with a Chinese passport was arrested in Gurgaon - and Indonesia. Links have also emerged to nine NBFCs (non-bank financial company) in Delhi, Ghaziabad, Nagpur, Mumbai and Bengaluru.
Officials say a "multi-city" probe is needed to understand the true extent of the scam. The money itself was routed through shell companies, multiple bank accounts, payment gateways and digital wallets to avoid detection.
On Wednesday evening the RBI cautioned individuals and small businesses against falling prey to unauthorised digital lending platforms and mobile apps that promised hassle-free loans.
"These platforms charge excessive rates of interest and additional hidden charges, adopt unacceptable and high-handed recovery methods and misuse agreements to access data on mobile phones of borrowers," the central bank said.
With input from ANI
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