[Update] MobiKwik Attributes INR 40 Cr Payout Fraud To Internal Processing Error

Update | September 18, 20:30 IST

A couple of days after reporting that it had fallen prey to a financial fraud to the tune of INR 40 Cr, fintech company MobiKwik informed the bourses that the mishappening arose from a “limited internal processing error” not a cybersecurity breach.

The incident at MobiKwik led to certain failed transactions being incorrectly marked as successful, resulting in unauthorised payouts to some merchants in and around Haryana’s Nuh district. 

Further, the company said that it took immediate corrective action and resolved the issue within 45 minutes. Following the incident, the company filed a first incident report (FIR) with local authorities and froze 2,000 merchant bank accounts. 

“As this was an internal issue, no banks or financial institutions were affected. MobiKwik has strengthened its monitoring systems and implemented additional control measures,” the company’s filings read. 

Original | September 17, 13:32 IST

Listed fintech company MobiKwik was defrauded of INR 40 Cr by some registered merchants and users between September 11 and 12.

In an exchange filing, the company said that some merchants and users, in collusion with each other from limited locations of Haryana, claimed unauthorised settlement from the company with an intent to gain an “unfair monetary advantage”.

The company said that it filed an FIR in Gurugram and arrests have also been made. It added that the legal enforcement agencies have taken proactive steps to put debit-freeze and lien mark all the bank accounts where the unauthorised settlements were credited.  

“Based on preliminary data, as a risk mitigating measure, the FIR was lodged for an amount of INR 40 Cr; out of which, the company has recovered around INR 14 Cr. Thus, the estimated net impact is INR 26 Cr. The company is taking aggressive collection efforts while pursuing legal course of action to recover the full amount over a period of time,” it added.  

According to a report by The Indian Express, the Gurugram Police said that the fraud took place via 2,500 accounts. These accounts were identified and frozen. Besides, 6 people were arrested for their alleged involvement with the matter.

This is not the first time MobiKwik is dealing with a fraud case in the company. In March, the company said that a former employee siphoned off INR 1.3 Cr from its books between August 2023 to September 2024 by altering the name of the merchants. 

The fintech company provides payments solutions to users and merchants via its mobile app. Its offerings include UPI payment services, credit cards, instant loans, payment gateway, POS machines and soundboxes.

On the financial front, the company’s revenue from operations declined 20.7% to INR 271.4 Cr in Q1 FY26 from INR 342.3 Cr in the year-ago quarter. Its net loss zoomed 6X to INR 41.9 Cr during the quarter under review from INR 6.6 Cr in Q1 FY25. 

The poor financial performance was attributed to the slow down of the lending business due to the new RBI norms.