“However, they withhold at least 25% of the money in the name of processing fees and additionally the interest rate is high in some cases which is against the norm,” the police commissioner said. Extra from Bangalore, Raman Gupta. .
He alleged that the role of finance professionals is shady in the operations of such instant loan apps on mobile phones.
“There is a major role of chartered accountants and company secretaries and these finance professionals in setting up such instant money lending companies. They become directors and appoint someone else as operator” , Gupta told PTI.
Gupta who had investigated the questionable companies of some of these mobile applications even agrees with the idea of blacklisting these financial professionals.
“Apps are developed in India and there are many software engineers here to develop them, but the brain behind this business model is Chinese,” he said.
Another expert said that these platforms at the time of downloading the application have access to phone calls, photos and videos, which are used to blackmail borrowers.
“In some cases, these digital lending apps are making a profit of up to 2,100%,” he said.
According to Gupta, these lenders hardly hire any debt collectors as they use the photographs, videos and contacts to blackmail people into coughing up the amount.
“To collect debts from defaulters, these digital money lending operators message contacts accessible from borrowers’ phones, use borrowers’ personal photographs and videos, and in some cases, transform the lenders’ photo of money and send them to contacts on the phone,” Gupta said.
According to financial industry sources, the dubious means of the digital money lending platform claimed many victims, especially during the height of the Covid-19 pandemic, when people were desperate for money and unable to repay on time.
Law enforcement sources also reported various cases of people ending their lives because of the case, but did not release any figures.
Gupta added “the only way is to create awareness against these apps. No one should download them. Also, digital money lending platforms should be regulated and a policy should be formulated.”