The notice to banks and payment gateways did not provide a reason for the decision. As reported by Mint, the Enforcement Directorate (ED) has directed banks and payment gateways (PG) to freeze the accounts of around 100 fin-tech companies. The notices do not provide a reason for the same. Who Is Affected by the Order? Affected fin-tech companies include: Pagarbook: a staff attendance and payroll management software. Kredily: a free Human Resources and Payroll management software. Progcap: developing a full-stack, retailer-focused bank catering to Small and Medium Businesses. Propelld: an education loan financing service. Pocketly: a short-term, instant personal loan service, targeted at students. Krazybee: a ‘non-deposit’ taking Non Banking Financial Company offering loans. Progcap, Krazybee, and Pagarbook have been reportedly reprieved from the order, along with approximately 15 other companies. What Questions Did the ED Ask? The ED also summoned some of the companies affected. One such founder said the agency broadly asked questions about the company’s investors, the funding raised, and its net worth. The company’s account was unfrozen after it submitted its answers to the ED. The same founder also suggested that the larger question on the agency’s mind was whether the company lent Chinese money. Why is the ED Concerned About Chinese Links? The ED’s actions, in this case, may reflect a long-term trend of shutting down predatory fin-tech companies offering short-term loans at extremely high-interest rates. Some investigations into these companies revealed links to Chinese entities. These platforms’ methods of pursuing repayment are often violent. On…
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Around 100 Fin-tech Companies’ Accounts Frozen By Enforcement Directorate
The Enforcement Directorate (ED) froze accounts of over 100 fintech companies but has not provided reasons or an FIR yet, as per media reports
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