The dangerous extortion racket run by instant loan apps and their link to China

In February this year, two Chinese nationals, along with 115 Nepali nationals, were arrested for their involvement in running an online fraud loan scheme that targeted Indians.

According to officers of the Chandigarh Cyber Cell, this trend of giving instant loans and extorting money gained momentum during the pandemic. (File photo, representational)

The arrest of a Chinese national, Wan Chenghua (32), by the Chandigarh Police on Monday (September 12) along with 20 others for allegedly blackmailing and extorting money from people through instant loan mobile applications has raised several concerns. According to officials of the Chandigarh Cyber Cell, the racket of luring people to take instant loans via mobile apps and then extorting money from them gained momentum during the Covid-19 pandemic.

How do instant loan mobile apps work?

These mobile applications provide small amounts in instant loans at a higher interest rate, ranging from 15 per cent to 20 per cent. These applications do not follow the strict procedures followed by banks before giving out loans, such as customer verification.

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A person who installs the application and wants a loan has to fill out an online form. To get the loan, the mobile user has to allow the application to access the contacts, photos, videos and all other digital content of the mobile phone. Many mobile applications provide the loan amount after deducting the interest from the principal amount. Some of the applications even recover the interest on a daily or weekly basis.

Are these apps illegal?

Gurcharan Singh, cyber faculty head of the Central Detective Training School (CDTS) in Chandigarh, said, “As many as 90 per cent of these mobile applications are illegal. The Reserve Bank of India has no control over these. These applications are a way of extorting money. The app handlers, operating through call centres, access the digital content of borrowers. When the borrowers fail to pay back the money due to the high interest rate, the handlers morph their pictures and circulate these morphed images to all the phone contacts of the person, thus defaming him”.

He said while these apps are often set up by Chinese firms, the callers used to trap borrowers are often Indians.

When did this trend start and how many such cases have been reported in Chandigarh?

According to officers of the Chandigarh Cyber Cell, this trend of giving instant loans and extorting money gained momentum during the pandemic and continued after that. In Chandigarh alone, more than 150 complaints of extortion and blackmailing via instant loan mobile apps have been filed.

In February this year, two Chinese nationals, along with 115 Nepali nationals, were arrested in Nepal for their involvement in running an online fraud loan scheme that targeted Indians.

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Who is Chinese national Wan Chenguha, arrested by Chandigarh Police?

Wan Chenguha arrived in India in 2019 on a work visa. He has been staying in different locations in Delhi and Noida despite his work visa expiring in 2021, said Superintendent of Police, Chandigarh Cyber Cell, Ketan Bansal. Those arrested along with him include Parvaj Alam alias ‘Jeetu Bhadana’ of Jharkhand, who was operating at least five instant money-lending applications, said police.

Saurabh Parashar

Saurabh Parashar is an Assistant Editor at The Indian Express, primarily responsible for the publication’s coverage of Himachal Pradesh. He is a seasoned journalist with over 17 years of experience in print media, specializing in crime, legal affairs, and investigative reporting. Professional Background Education: He holds a Master’s degree in Mass Communication from Guru Jambheshwar University of Science & Technology (Hisar) and a Law degree from Himachal Pradesh University (HPU), Shimla. This legal background significantly informs his reporting on complex judicial and administrative matters. Career Path: Before joining The Indian Express in 2017, he spent 12 years with The Times of India. Core Beats: His primary focus is the socio-political landscape of the hill state, with a specific emphasis on the environment, forest conservation, drug menace (specifically "Chitta"), affairs related to tribal and archaeology and the unique challenges of governance in high-altitude regions. Recent Notable Articles (Late 2025) His recent reporting highlights the critical intersection of policy, law, and social safety in Himachal Pradesh: 1. "Himachal’s battle against Chitta: Why the border areas are most vulnerable" (Late 2025): An investigative look at the transit routes from Punjab and the impact on local youth. 2. "Shimla ropeway clears key hurdle as 820 trees face the axe :According to the Forest Survey of India’s 2021 assessment, 47.21 percent of Shimla’s 5,131 sq km geographical area is under forest cover (Nov 17, 2025). 3. "Himachal to handover 2.7427 ha of non-forest land for Shimla Ropeway: Given the land’s non-forest nature, RTDC and the state will not require permission from MoEFCC" (Nov 18, 2025) 4. "How the centuries-old Jodidara tradition is fading in Himachal’s Trans-Giri region: Jodidara: a form of fraternal polyandry—has long been part of Hatti tribal culture in the Trans-Giri region of Himachal Pradesh and adjoining Uttarakhand. It is believed to have evolved to prevent division of ancestral land and maintain unity among brothers in the harsh, mountainous terrain" (Aug 18, 2025) Legal & Agricultural Affairs "Kisan Sabha hails SC’s setting aside Himachal HC order to remove orchards from forest land" (Dec 18, 2025): Covering a major Supreme Court victory for farmers, where a High Court order to remove fruit-bearing apple orchards was overturned. "Himachal Cabinet nod to new tourism policy; focus on home-stays in tribal areas" (Dec 11, 2025): Detailing the legislative push to decentralize tourism and bring economic benefits to Lahaul-Spiti and Kinnaur. 3. Governance & Environment "Forest rights and development: Why Himachal is seeking more leeway from Centre" (Dec 19, 2025): Reporting on the legal hurdles faced by the state in infrastructure projects due to the Forest Conservation Act. "Cloudbursts and resilience: How Himachal’s remote villages are building back better" (Nov 2025): Following up on the long-term rehabilitation efforts after monsoon-related disasters. Crime especially cyber crimes, crypto currency etc: crypto currency: "Agents in uniform, motivational speeches, lavish parties: How a Himachal crypto con went unnoticed:A serial conman, a ‘Nelson Mandela Nobel Peace Award winner', and retired policemen got together to pull off a Rs 1,740-crore fraud" (Nov 10, 2023) Signature Beats Saurabh is recognized for his tenacious reporting on the state's drug epidemic. His deep familiarity with the topography and tribal culture of Himachal allows him to report from remote locations like Spiti, Pangi, Shillai, which are often overlooked by national media. His legal expertise makes him a primary choice for covering the Himachal Pradesh High Court on issues ranging from local body elections to environmental PILs. X (Twitter): @saurabh_prashar . ... Read More