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I-T Dept raids instant loan app company; Rs 500-cr transferred illegally

The CBDT stated on Wednesday that a fintech company that provides rapid loans through a mobile app was found to have repatriated Rs 500 crore in "non-genuine" funds from abroad.


The data was acquired by the Income Tax Department after a raid on the corporation on November 9 in Delhi and Gurgaon (Haryana).




"During the investigation, it was discovered that the company reportedly charged a very high processing fee at the time of loan issuance.


The Central Board of Direct Taxes (CBDT) noted in a statement that this "results in an effective higher burden of compensation on the borrowers."


The corporation is owned by a Cayman Island-based entity, which is ultimately "managed by an individual from a neighbouring country," according to the report.


"The company imported nominal initial money into India through Foreign Direct Investment (FDI), but it received significant working capital loans from Indian banks."


"The company's business model results in strong capital rotation, as indicated by a turnover of Rs 10,000 crore in its first year of operation," it stated.


According to the CBDT, which sets policy for the department, the corporation remitted roughly Rs 500 crore to its offshore group companies under the guise of buying services over a two-year period.


"However, information uncovered throughout the search indicates that such transfers to the group companies are either significantly inflated or non-genuine."


"Evidence discovered also suggests that an internal web-based application for lending business was operated from outside India," the report stated.


Statements from crucial individuals, including international nationals, were also recorded by the department.


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