Telangana: Cops invoke Nizam-era Money Lenders Act against loan apps | Hyderabad News

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HYDERABAD: To prevent loan app companies from harassing the public, cops have decided to book them under the Money Lenders Act for running business in the state without a license.
Following a complaint from an IT worker that she was threatened with transformed nude photos and forced to pay Rs 2.4 lakh for a loan of Rs 40,000, cyberabad the police invoked the Nizam-era law and filed a complaint under the Telangana Money Lenders Act versus loan wondercash advance, manual loan and winter loan.
The law originally formulated during the rule of the Nizams was later enacted in united Andhra Pradesh and later in Telangana. The Money Lenders Act was also used by the states against the Kabuliwalas who then mainly practiced loan sharking.
“We have already used the Telangana Money Lenders Act in the Old City against several ‘pahelwans’ who were charging high interest. According to Section 3 of the Act, no one may engage in money lending business. money without government permission. It is an offense punishable by six months in jail or a fine. This act can be used against loan application companies,” said Vuppu Bala Butchaiah, legal adviser to the police. from Cyberabad.
Cyberabad Police have also added charges under computer law, criminal intimidation and insulting indecent women against loan applications apart from money lenders law.
The 28-year-old software professional from Madhapur filed a complaint on August 25.
‘Paid 6 times the amount borrowed, but still harassed’
She had downloaded Wonder Loan, Cash Advance, Hand Loan and Winter Loan and took instant loan of Rs 40,000 at different intervals, Cyberabad Cyber ​​Crime PS Inspector said. K Srinivas said.
In her complaint, she said that after the lending app executives started harassing her with messages and threats, she paid around Rs 2.4 lakh between July 17 and August 22.
“But even after paying six times the amount borrowed, they did not stop the harassment and forwarded transformed nude images to my contacts,” she said.
While Cyberabad cops have invoked the Money Lenders Act, Rachakonda Police have yet to do so. On August 18, after a complaint from a Ghatkesar resident against Rupee Way, Rachakonda cops booked a case solely under IT law and IPC sections.
The victim said the app executives forced him to pay Rs 6.4 lakh.
Most of these loan application companies are directly controlled by Chinese funds, according to a survey by the Enforcement Directorate (ED).
“Various fintech companies backed by Chinese funds have entered into agreements with NBFCs to provide instant personal loans ranging from 7 to 30 days… NBFCs were expected to hire fintech companies for the discovery of customers, but in reality they relied on NBFC’s license for lending activities, said the Enforcement Branch.
“A very high interest rate and high late fees were imposed. While fintech apps made most of the profit, NBFCs earned a commission for letting them use their license,” the ED said.
All decisions on interest rates/processing fees/platform fees were made by fintech companies working on instructions from operators in China and Hong Kong, ED investigation found .
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