Cash Bean App : The Enforcement Directorate (ED) has ordered the confiscation of assets worth more than Rs 252 crore of the Indian unit of a Norwegian company 'controlled' by Chinese individuals. This order has been given under the FEMA investigation against the mobile app 'Cashbean' which is working illegally for giving loans. The Enforcement Directorate said that on October 7, an order was issued against PC Financial Services Private Limited (PCFS) under the Foreign Exchange Management Act (FEMA). Along with this, a fine of more than Rs 2,146 crore was also imposed on the company. PCFS is a subsidiary of Norway-based Opera Group.

Why the action

The ED said in a statement that overall PCFS is 'controlled' by Chinese owners. It is involved in the business of lending money to people in India through its mobile app 'Cashbin'. According to the investigating agency, PCFS sent Rs 429.30 crore to its related foreign group companies under the guise of 'import of software licenses and services', which was found to be fake. The Reserve Bank of India had found in February 2022 that PCFS was charging excessive interest rates and other charges from borrowers in a 'non-transparent' manner. Also, it was misusing the logos of RBI and CBI for recovery from borrowers, which is a violation of the Code of Fair Practices.

Cancellation of company registration

The ED said that the RBI canceled the company's certificate of registration and barred it from functioning as a non-banking financial institution. The investigating agency had first ordered the seizure of assets worth Rs 252.36 crore in 2021. Later this order was approved by the appropriate authority under FEMA in February, 2022. According to the ED, PCFS filed an appeal against this order before the appellate forum and the final decision is pending. However, the investigating agency said that it filed a complaint about the violation of FEMA rules before the adjudicating authority in June 2022. After this, the authority issued a show cause notice to the company and it was complied with.