Undeterred by the police probe into app-based loan finance companies, loan recovery calls made to customers are eventually forcing them to end their lives.
On Saturday, G. Chandra Mohan, 36, supervisor of a private warehouse, committed suicide at his residence at Gundla Pochamma village of Pet-Basheerabad in Medchal-Malkajgiri district, about 30 km from Hyderabad. This is the fifth “forced suicide” by these companies existing only as mobile applications.
Cyberabad Commissioner of Police V.C. Sajjanar said that the victim took a loan from one such company a few weeks ago and to repay the amount before the deadline of one week, he took loans from other unauthorised app available on Google Playstore.
“He took around ₹70,000 from at least nine such apps and failed to repay. As a result, the lenders branded him a defaulter and began calling him over phone and threatening him repeatedly,” he said.
The firms also phoned and sent messages to his relatives and friends to defame him, forcing Chandra Mohan to take the extreme step.
The Telangana police have identified at least 180 ‘unauthorised’ instant loan apps and at least 30 people, including four Chinese nationals. The thirty people have been arrested from Hyderabad, Cyberabad, Rachakonda and Warangal Commissionerates. Two sons of a police officer in Kurnool were said to be kingpins in floating a few of these apps at the behest of Chinese entrepreneurs.
“We wrote to Google to take down the apps whose operations are illegal,” Mr. Sajjanar said.
Hyderabad Additional Commissioner of Police (Crimes and SIT) Shikha Goel said that so far they have identified four companies which are operating at least 30 apps with a whopping ₹21,000 crore (4.57 billion dollars) volume in over 1.40 crore transactions. “This was the number given by us by RazorPay payment gateway, and it is still under investigation,” she said.
With bases at Hyderabad, Bengaluru and Gurugram, the business has flourished thanks to COVID pandemic that drove thousands of people to penury. “These companies’ establishment almost coincided with the pandemic and we have frozen around ₹80 crore in 10 bank accounts,” Ms.Goel said.
The financial stringency in the system that resulted in lowering of credit card limits, the loss of jobs or slashing of take home salaries has forced unwary people to turn to drawing loans from these apps-based companies at very high interest rates.
The suicides that have been reported in Telangana appear to be largely due to humiliating and coercive methods used by these companies at the loan recovery call centres which were simply unbearable for people who failed to repay the loans. The use of harsh language did not give a chance for either roll-over of loans or extension of repayment deadline, a norm in all banking and financial transactions, the investigators said.
According to Mr. Sajjanar, the firms took a interest of at least 35 % and the amount kept increasing till the loanees repay the amount.
“We are investigating the cases collectively and we request people not to take extreme steps and rather approach police and lodge a complaint about the harassment and public shaming,” the Commissioner said.
(Hyderabad-based suicide intervention centre Roshni can be reached at +914066202000 or 6666 1117)
