Xiaomi to only sell smartphones in India now

New Delhi: Xiaomi India has shut down its financial services business, four years after its launch, terming the decision as part of a strategic shift to focus on the core business of selling smart devices.

The decision comes at a time when Indian authorities are probing the local unit of the Chinese smartphone company for alleged violation of foreign exchange rules. The Enforcement Directorate that probes money laundering has frozen the company's bank assets worth ₹5,500 crore.

"As part of the annual strategic assessment activity and as a response to enhanced focus on our core business services, we closed the Mi Financial Services in March 2022," a Xiaomi India spokesperson said in a statement.

Xiaomi had two apps under its financial services business. Mi Pay handled payments via UPI, credit and debit cards starting 2019, while Mi Credit, first launched as a pilot project in May 2018, was a marketplace for microfinance with low interest rates.

The company has pulled out both apps from the Google Play Store and its own app store.

The national payments corporation of India (NPCI), which facilitates UPI payments in the country, has also delisted the Mi Pay app.

"In a short span of four years, we were able to connect and support thousands of customers. We are working with our partners and supporting our consumers during this process," the company said.

Xiaomi had disbursed more than 100,000 loans with credit of up to ₹25 lakh. Mi Pay had a 50 million pan-India user base, ET reported last year in August.

Xiaomi's financial services vertical has been operating as an independent business, with the company starting to offer business loans, gold loans, and credit line card services.

However, the company has been under intense scrutiny of government agencies. It is under investigation for allegedly sending money out of the country using illicit means under the guise of royalties. The probe led to the ED freezing its accounts in April.

Xiaomi has maintained that its operations have been above board and has denied any wrongdoing.

In a petition filed with the Karnataka High Court, Xiaomi had said the seizure order had "effectively halted" its operations in India.