The Reserve Bank of India (RBI) has begun looking into the sources of funds for app-based instant loan companies accused of harassing vulnerable borrowers, said a person aware of the matter. Strong arm tactics to recover dues, including naming borrowers, have led to at least two suicides, according to media reports. According to this person, RBI is likely to launch an investigation into whether some banks allowed funds to flow into these apps without conducting mandatory due diligence.
The RBI scrutiny follows a probe by the Enforcement Directorate, which has filed a money laundering case on the basis of first information reports registered by police against instant loan apps connected to overseas jurisdictions.
Courtesyg: Google (photo)
