Karnataka High Court Asks Centre To Check If Regulations Are Needed To Curb 'Profile Funding' Scam

The Karnataka High Court on Tuesday (August 5) asked the Union Ministry of Finance to take note of the petitions filed by persons claiming to be victims of 'Profile Funding' and see whether regulations are to be put in place.For context, profile funding is an alleged scam wherein victims are purportedly promised by scammers that the victims' bank account will be funded based on the their profile, in lieu of personal and financial details. Victims are allegedly told that their profiles will be used for applying for loans. Justice B M Shyam Prasad while dictating his order said “This court must also state that petitions of this nature are too frequent to be ignored and the Secretary of Ministry of Finance, Union of India must take note of the same, to see whether regulations must be put in place.” The court directed the Deputy Solicitor General Shanthi Bhushan H to forward the copy of the order passed to the Ministry, for its consideration. The Court was hearing a plea by Vijayeendra G Muddebihalkar and others who had sought a direction to restrain banks/financial institutions (respondent no.8 to 12) from taking any coercive measures against him from recovering any amount comprised in loan account numbers. It further sought a direction to banks to discharge the petitioners from the loan and issue the no objection certificate in loan account numbers mentioned, under their names. Also direct to reframe the CIBIL scores after discharge from the loan in loan account numbers, pending with banks. The petitioners contended that they were induced into entering into Tri-parte agreements with assurance of being given completed apartments on the project. The counsel claimed that he was informed by the bank officials that he was a victim of 'profile funding'. However, during the hearing the petitioners' counsel admitted to having entered into certain tri-parte agreements with certain builders and financial institutions, who were arrayed as respondents in the petition. Following which the bench said, “This court is not inclined to grant any indulgence when it is admitted that petitioners are party to Tri-parte arrangements. If there are proceedings initiated they must defend those proceedings on all grounds that could be available to them.”The plea was disposed of. Appearance: Advocate Abhishek Huddar for Petitioner. Deputy Solicitor General Shanthi Bhushan H for R1. Citation No: 2025 LiveLaw (Kar) 266 Case Title: Vijayeendra G Muddebihalkar & Others AND Union of India & Others. Case No: WP 23590/2025

Karnataka High Court Asks Centre To Check If Regulations Are Needed To Curb 'Profile Funding' Scam

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Karnataka High Court Asks Centre To Check If Regulations Are Needed To Curb 'Profile Funding' Scam

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