ED seizes Rs 131 crore from Chinese-owned NBFC for foreign exchange breach

New Delhi: The Enforcement Directorate (ED) on Thursday said it has seized Rs 131 crore from Chinese-owned NBFCs. It violated the rules of foreign exchange.

Non-Banking Financial Company (NBFC) provides instant personal micro loans through PC Financial Services Pvt Ltd and its business mobile application Cashbeen. It has the potential to be a dubious investment in foreign money.

The case came on the radar of ED when many NBFCs and fintech companies provide instant personal loans through mobile apps. These loans are provided at extremely high rates and extort money from the customer by using his data illegally and threatening him through call centers.

The illegality and unauthorized use of such apps was reported in several states last year. Corona caused many people to face threats and bullying from these dubious companies after taking loans at such high interest rates.

PCFS is a wholly owned subsidiary of SA D CV Ople Digital Services of Mexico, operated by WOS of Hong Kong-based Tenspot Pesa Ltd. It is owned by Cayman Island-based Opera Limited and Wisdom Connection Eye Holding, which is owned by Chinese resident Zhou Yanhui.

PCFS, an Indian-origin company, was founded by an Indian resident in the 19th century and received an NBFC license in 2006. After the approval of the Reserve Bank in 2014, its ownership passed to a Chinese-owned company. The ED alleges that PCFS has illegally transferred huge sums of money outside India. It has transferred funds abroad stating that it has imported non-existent software and is providing marketing services and these funds have been kept in the accounts of affiliated foreign companies. In this way, it has violated the Foreign Exchange Management Act (FAME). The Reserve Bank has stated about this breach. So the ED has seized Rs 131.11 crore in its various banks and payment gateways. It had seized Rs 106.93 crore from the same NBFC in August.