India Raids Online Payment Firms Over 'illegal Loans'

India's financial crimes agency said on Saturday it had raided the offices of several online payment platforms, including local market leader Paytm, for allegedly facilitating illegal loans.

The Enforcement Directorate said it had received several complaints of extortion and harassment from members of the public who had taken small loans through mobile apps.

It said that investigations had found the apps were run by entities registered at fake addresses.

The agency said in a Saturday statement that popular Indian payment gateways, including Razorpay and Cashfree, were "generating proceeds of crime" from the loan companies.

Officers searched the offices of both companies and Paytm in the tech hub Bangalore on Friday, the statement said.

The agency added it had seized around US$2 million from the accounts of the entities that controlled the loan apps.

A report by India's central bank last year said it had found around 600 illegal loan apps operating in the local market.

Authorities have cracked down on the online money-lending operations, and the raids came a day after the Reserve Bank of India issued new operating guidelines for the industry.

Police in New Delhi last month arrested 22 people for allegedly exhorting money on the pretext of giving loans, local media reported. (AFP)