ED seized ₹859cr+ under PMLA and Rs 189cr+ under FEMA Act

Feb 08: 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. This was stated by Union Minister of State for Finance Dr Bhagwat Kisanrao Karad in a written reply to a question in Rajya Sabha today.

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 to curb 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 has been generated and acquired by accused persons/entities through illegal loan apps, the Minister stated.

In these cases, the Minister stated that as of date, proceeds of crime of Rs. 2,116 crores (approx) have been identified, out of which proceeds of crime amounting to Rs. 859.15 crores have been attached/seized / freezed 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.

Giving more information, the Minister stated that the RBI has issued a 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 procedures for opening accounts and monitoring transactions of suspicious nature to avoid its misuse for money laundering and reporting the same to the appropriate authorities, the Minister stated.

The Minister further stated that RBI has issued digital lending guidelines dated 2.9.2022 which advises measures including, inter alia, due diligence of Loan Service Providers (LSPs), direct disbursal of loan from the bank account of a 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.

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