Union Minister of State for Finance Dr. Bhagwat Kisanrao Karad in a written reply to a question in Rajya Sabha today, February 7, 2023, informed that the RBI has issued a list of Digital Lending Apps (DLAs) being used by Regulated Entities (REs) of RBI to the Ministry of Electronics & Information Technology (MeitY). The list has also been forwarded to tall registered App stores like Google Play store, Microsoft store, etc. RBI has requested these App stores to ensure that only these authenticated Apps are displayed for user installation to prevent fraud.
This issue comes to light with the increasing number of money laundering cases being registered over the past few years through illegal loan applications. As per the Ministry of State for Finance, the Directorate of Enforcement (ED) is responsible for preventing cases related to money laundering under the provisions of the PML Act, 2002. Under such provisions, the ED has proceeded with the investigation in several cases where the accused have acquired funds through illegal loan apps.
During the fiscal years between 2012-13 to 2021-22, ED filed a total of 3,985 criminal complaints under the Prevention of Money Laundering Act (PMLA) and 24,893 under the civil law of FEMA. As per the Ministry’s written statement by the then Minister, Pankaj Chaudhary, till March 31, 2022, the ED recorded 5,422 cases under the PMLA, attached proceeds of crime of Rs. 1,04,702 crore (approximately), and filed prosecution complaints (charge sheets) in 992 cases resulting in the confiscation of Rs 869.31 crore and conviction of 23 accused.
As of today, the Ministry claims that 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 /frozen 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.
Under the PML Act, of 2002, RBI has issued a master circular on KYC norms /Anti-Money Laundering (AML) standards/Combating Financing of Terrorism (CFT)/Obligation of banks and financial institutions. All financial institutions have also been advised to follow a certain criterion for user information and account set-up. This has been done to monitor suspicious transactions to prevent misuse of money and report any case of laundering to the concerned authorities.
Presently, as per law, the punishment for money laundering is rigorous 3-year imprisonment which can go up to 7 years and it is a non-bailable offense.
