Fintech firm MobiKwik and its partner Lendbox are facing legal challenges following First Information Reports (FIRs) filed by investors. The complaints center on their peer-to-peer (P2P) lending product, MobiKwik Xtra, with allegations of blocked withdrawals and misuse of funds. The company has since issued a statement clarifying its role and addressing the concerns raised by users.
Investor Complaints and Legal Action
Several investors have filed complaints in Bengaluru, alleging that MobiKwik and Lendbox engaged in deceptive practices. One FIR claims an investment of ₹4 lakh remains inaccessible, while another cites ₹91,341 of a ₹3 lakh investment as being blocked. These legal actions accuse the firms of cheating and dishonestly inducing property delivery under various statutes.
The complaints further allege that the companies marketed MobiKwik Xtra with promises of fixed-deposit-like returns and easy liquidity. However, investors claim their funds were diverted to new borrowers without their consent, leading to defaults and withdrawal restrictions. One complainant estimates that over 630 investors have collectively invested more than ₹6 crore in the scheme.
MobiKwik's Official Stance
In response to the allegations, MobiKwik has clarified that it acted solely as a distribution partner for the P2P product offered by Lendbox. The company stated that customers were made aware of the product's structure and the inherent risks involved before investing. It also noted that users were informed about modifications mandated by recent regulatory changes.
Citing data from Lendbox, MobiKwik asserted that borrowers have already repaid over 90% of the aggregate amount to lenders. The remaining balance is currently part of an active recovery and repayment process, which remains a priority. MobiKwik affirmed its commitment to supporting a resolution and is extending full cooperation to the authorities.
The Regulatory Landscape
This controversy unfolds against a backdrop of increased regulatory oversight by the Reserve Bank of India (RBI) on P2P lending. The RBI introduced new guidelines to curb the misselling of such products as safe investment vehicles, imposing restrictions on marketing and lending caps. These rules aim to protect consumers from platforms promising assured high returns with high liquidity.
The timing of these events is notable, as MobiKwik recently secured a non-banking financial company (NBFC) license from the RBI. This license grants the company greater control over its lending operations, but the ongoing investigation raises questions about its product governance. The situation highlights the growing pains within India's rapidly evolving fintech sector.
The legal proceedings against MobiKwik and Lendbox place the companies under significant scrutiny while they navigate a stricter regulatory environment. While MobiKwik maintains its position as a mere distributor and points to a high repayment rate, the investor complaints highlight critical issues of transparency and trust. The resolution of this case will be closely watched as it could set a precedent for P2P lending platforms in India.