Authorities in Bengaluru have initiated formal investigations into Mobikwik and Lendbox following multiple complaints that their P2P lending platform, Mobikwik Xtra, blocked investor funds and failed to honor withdrawal requests, prompting concerns over fund mismanagement and regulatory breaches.
- FIRs filed in Bengaluru over blocked investor withdrawals on Mobikwik Xtra
- Over ₹11 crore collectively invested by more than 1,000 investors affected
- Concerns arise amid RBI crackdown and stricter P2P lending rules
What happened
Bengaluru police registered first information reports (FIRs) against fintech companies Mobikwik and Lendbox following complaints from investors who alleged that their funds were blocked on the Mobikwik Xtra platform. Investors claim the companies promised fixed-return-like investments but failed to allow withdrawal of their principal amounts. Specific complaints included hundreds of investors nationwide with locked sums totaling over ₹11 crore.
The allegations include improper diversion of funds contrary to Reserve Bank of India (RBI) regulations, with reports pointing to dormant or defaulting linked borrower accounts while investor money remained trapped. This has led investors to seek legal action including asset freezes against the entities involved. Mobikwik has so far declined to comment on the allegations.
Why it matters
The complaint coincides with an ongoing regulatory crackdown by the RBI against P2P lending platforms for misselling and inadequate risk disclosures. Since mid-2024, new RBI rules imposed stricter controls on marketing, lending caps, and operational practices, disrupting business models that rely heavily on retail investor funds.
Platforms like Mobikwik Xtra, launched in 2022 to offer higher-yield, low-volatility lending via NBFC partners, have faced criticism for policy changes that left investors locked out of their funds. The FIRs spotlight the difficulties fintechs encounter in balancing investor expectations with compliance in a tightening regulatory environment.
What to watch next
Further RBI guidance and enforcement actions could reshape the landscape for alternative lending products. Fintech firms may need to improve transparency, compliance, and customer communication to sustain their business models in an increasingly regulated and risk-averse market.