AT upheld the provisional attachment order under the Prevention...

AT upheld the provisional attachment order under the Prevention of Money Laundering Act against the appellant NBFC and associated entities operating instant micro-loan mobile applications. AT found that the business model-charging 30-40% processing fees on very short-term loans, resulting in effective interest rates exceeding 1500% per annum, coupled with abusive recovery practices and misuse of personal data-constituted unfair practices and violated RBI's regulatory framework and fair practice requirements. AT rejected the appellant's contention that core NBFC functions were lawfully outsourced, holding that key management functions had impermissibly been delegated to service providers. Considering the exploitative nature of the operations and reported borrower suicides, AT concluded that the revenue constituted proceeds of crime and dismissed the appeal, confirming the attachment.

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