Indiabulls-owned Dhani app disburses loans to PANs not owned by borrowers

ByRichard C. Sloan

Feb 15, 2022
CHENNAI: Shedding light on the need for stronger e-KYC checks in lending apps and the inadequate security of personal data in the country, several people took to Twitter on Tuesday to complain that their PANs had been misused, and Indiabulls-owned fintech startup Dhani had disbursed loans on their PANs, to third parties, without them benefiting from those loans.
These loans are now reflected in the credit reports of those affected as defaulters, and some of them are also looking at show cause notices and facing calls from debt collectors. Most of these disbursements would also have occurred in Dhani’s wallets and not in bank accounts.
“We have become aware of a few cases where unscrupulous people have used other people’s PAN and therefore credit bureau credentials to take out a loan through the Fintech operation on the app. We will not overlook any effort to mitigate any possibility of identity theft on our fintech platform,” a spokesperson for Dhani told TOI when contacting the company.
Listing the steps he has taken, Dhani said he is currently speaking to all complainants and establishing whether it was a case of identity theft and then immediately rectifying their records at the credit bureaus. . “We have integrated G-defence which is a global security platform to double-check each device against a specific client and PAN across various data fields. This will put an end to these errant incidents of identity theft,” said added the spokesperson. The company has also increased its customer service team to 6,500 people to respond to customer inquiries.
The issue was revealed on Monday when shocked Twitter user Aditya Kalra shared a snapshot of his credit report in which he found details of a loan given to Dhani. “Shocking revelation in my credit report. A loan disbursed by IVL Finance (Indiabulls) @dhanicares with my PAN and name, addresses in Uttar Pradesh and Bihar. I have no idea. it happen on my name and my PAN. By default already,” he wrote, tagging the RBI.
This sparked a wave of complaints and also led to the discovery of old tweets in which people alleged that loans they had never applied for were disbursed by the Dhani app on their PAN charts and reflected now in their credit reports. They demanded a response from Dhani, and some users said they wrote to the RBI and filed a complaint with the cybercrime unit.
“There is a loan with my PAN (wrong date of birth) and an address that I have never been to/did not know existed (Nandurbar, Maharashtra) in my credit report attributed to IVL Finance. should I do now?” said communications consultant Karthik Srinivasan. Srinivasan told TOI that he wrote to Dhani and the RBI mediator and raised a dispute with credit bureau Experian to remove the loan. “It will be a process that will take time, but it’s not my fault,” he said.
“Today a collection guy came to my house to show me a legal show cause notice that I used a 50,000 loan and defaulted,” wrote fellow Twitter user Sai. Sasanka.
Dhani has made loans to over 35,000 people in the past 12 months and says “99.9% went to genuine people”. Dhani app has more than 5 crore downloads on Google play store.
New-era fintech apps that extend credit typically use an e-KYC process to verify and validate the identity of borrowers before releasing funds. Most startups take photos of the documents and use various technology tools like AI, ML, and computer vision, among others, to validate the input.
Srikanth L of CashlessConsumer, a fintech consumer collective, said a review of all complaints shows they do not appear to be individual cases of fraud, but organized crime. “In an ideal situation, there is video KYC in addition to Aadhaar/PAN based e-KYC, and most applications perform OCR (optical character recognition) verification of identity proof. certainly did not happen. [Dhani] probably only took an ID entry,” he said.
The financial advisors TOI spoke to urged regulators to take the company to task and penalize them, and as far as those affected are concerned, the process of cleaning up their credit reports is expected to be a lengthy one.