Written by Sarosh Bana.
Ruthlessly hounded borrowers in India heaved a collective sigh of relief as concerted raids by the Nepal police finally smashed the Chinese-Nepali-Indian ring of loan app operators who had for long been targeting poor loan-seekers in India from out of Nepal.
It is, however, felt that authorities in these three countries would have to collaborate in tackling this menace, which has international ramifications, and act jointly against these criminals to prevent any recurrence.
At a time when most mainstream newspapers in India have been rendered pliant by an authoritarian regime, it was Mumbai’s redoubtable activist tabloid, Mid-Day, which forced this action, after doggedly pursuing the issue on a daily basis, interacting with the Mumbai Police and Cyber Cell, and even sending reporters to Nepal to urge the authorities there to act.
The brutal loan recovery racket, which drove several borrowers in India, particularly Mumbai, to commit suicide and demeaned numerous others on social media, was found to be operating from Nepal, with the whole enterprise being managed by local and visiting Chinese.
If it hadn’t been for Mid-Day, the Nepal police would not have known about this vast criminal nexus being run as a bona fide business, as the Nepali public was not affected and thus there were no complaints filed at local police stations.
In the initial series of raids, the police there stormed three illegal call centres in the capital city of Kathmandu that were registered under the Companies Act and which were frequented by Chinese nationals who came on business visas. Around 190 Nepalis, mostly young girls and boys who were fluent in the Indian language of Hindi, were arrested. Five Chinese nationals and two Indians were also taken into custody.
The youngsters were initially informed they were being recruited for promotional activities, but were then imparted training to be abusive and aggressive “loan recovery agents” and tasked to extort targeted sums of money from the hapless Indian borrowers and blackmail them with morphed pictures if they failed to pay up or were lax in paying up.
The raiding police found the operators using such high technology that they were hardpressed in retrieving the data. They are, however, awaiting forensic reports on the data contained in hundreds of laptops and computers that were seized in the raids, and have shared details of their investigation with their Indian counterparts to help them probe the cases as part of a larger conspiracy.
Without local complaints concerning the blackmail and threats, Nepal police could detain the offenders only on the relatively lenient charge of causing public nuisance. They could moreover not act against the Chinese kingpins of the operation as they had fled Nepal or had been managing the syndicate from China. These Chinese culprits evidently felt emboldened to establish the call centres in Nepal with the sole aim of targeting Indians, because if they had ventured into India, the Indian authorities could have acted against them on specific complaints.
A large number of cash-strapped people in India, many of them in the country’s financial capital of Mumbai, fell victim to these questionable mobile apps that have been mushrooming on the internet to lure potential borrowers with offers of instant loans. The apps sought personal data and promptly gained complete access to the borrower’s phone, following which those behind this fraud resorted to ruthless recoveries by recruiting agents, at times college-going youngsters, who they provide generous commissions from the amounts they reclaim. To pay off the dues illegally demanded of them, borrowers often took loans from other digital apps, sinking deeper into the scam.
India has no strict regulatory controls for money-lending and the police too are hamstrung by the weak rules, as a result of which instant loan mobile applications have proliferated. Many foreign investors, particularly from China, have been investing heavily in these apps that they run remotely, as has been seen with regard to Nepal, where they rake in most of the proceeds and yet provide lucrative employment to locals who do their dirty job.
As authorities in India are assessing 50 of these apps, a report last November by a Reserve Bank of India Working Group estimated that 600 illegal loan apps were in operation in India.
With a monthly salary of Nepali Rupees (Rs) 200,000 (A$2,250), a 25year-old youth from India, Niranjan Kumar, who had no education beyond school, was the highest-paid employee in the illicit operations, and additionally got commission on the money recovered from Indian borrowers. Kumar had arrived in Nepal just 18 months earlier, and he supervised the operations and was answerable to his Chinese handlers who ran the call centres. He had also helped set up the three facilities and had the responsibility of recruiting Hindi-speaking candidates. He too was arrested.
A 19-year-old Indian woman, Neha Gupta, was the group leader of one of the call centres. She too interviewed Nepali youth who were good at Hindi, and drew a monthly salary of Nepali Rs65,000 (A4731), plus commissions based on recovery.
Gupta had come to Nepal a year ago with another Indian, 26-year-old Manish Saini, who was the manager at her call centre and earned around Nepali Rs100,000 (A$1,125) plus commission. He also provided the content and scripts to the employees for targeting Indian borrowers.
Some other Indian nationals were also suspected to have worked at the call centres before returning to India to set up call centres there.
The police raids in Nepal have dismantled only the operations in that country, whereas this illegal industry is still largely intact in India, though temporarily subdued owing to the police action in Nepal. It will require stricter laws and their purposeful implementation to unshackle the economically and socially weak borrowers from this massive swindle.
