ED seizes Rs 859.15 crore proceeds of crime under PMLA in illegal loan app cases: MoS Finance in Rajya Sabha

New Delhi [India], February 7 (ANI): The Enforcement Directorate has attached proceeds of crime worth Rs 859.15 crore under the PML Act 2002 so far in connection with money laundering through illegal loan apps, Union Minister of State for Finance Bhagwat Kisanrao Karad said in Rajya Sabha on Tuesday.

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 with curbing money laundering under the provisions of the PML Act, 2002. “ED has initiated an investigation under PMLA in several cases where the proceeds of crime have been generated and acquired by accused persons/entities through illegal loan apps,” he said.

In these cases, the Minister stated that as on date, proceeds of crime of Rs 2,116 crore (approx) have been identified, out of which proceeds of crime amounting to Rs 859.15 crore have been attached/seized/frozen under the provisions of PMLA.

Further, assets amounting to Rs. 289.28 crores have been seized under section 37A of the Foreign Exchange Management Act, 1999, the Minister informed.

In a written reply to a question in the upper House, the Minister further said that the Reserve Bank of India (RBI) has furnished the list of Digital Lending Apps (DLAs) being used by Regulated Entities (REs) of RBI to the Ministry of Electronics & Information Technology (MeitY), which in turn, has shared the list with a respective intermediary (App Stores) and requested them to ensure that only the apps figuring in the list are hosted on their app stores.

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 the 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 the appropriate authority,” he said.

The Minister further stated that RBI has issued digital lending guidelines dated September 2, 2022, which advises measures including, inter alia, due diligence of Loan Service Providers (LSPs), direct disbursal of loan from the bank account of the lender to bank account of the borrower without any pass-through/pool or third-party account to avoid layering, publishing of the list of DLAs, LSPs engaged by REs and details of activities to avoid anonymity.