The Reserve Bank of India (RBI) on December 11, 2023, warned loan borrowers that misleading advertisements promising loan waivers have proliferated recently and cautioned the public against falling prey to such campaigns. These advertisements from unauthorized entities, circulating in print media and across various social media platforms, entice borrowers with the offer of loan waivers.
These entities are actively promoting such campaigns and "reports of such entities charging a service/legal fee for issuing ‘debt waiver certificates’ without any authority," RBI said in a release.
In certain locations, RBI found that specific individuals have been found running campaigns that undermine the rights of banks to enforce securities pledged with the loans.
Such entities are misrepresenting that dues to financial institutions including banks need not be repaid. Such activities undermine the stability of financial institutions and, above all, the interest of the depositors. It may also be noted that associating with such entities can result in direct financial losses, RBI warned Members of the public are cautioned not to fall prey to such false and misleading campaigns and report such incidents to law enforcement agencies, RBI warned.
Further, these scams also undermine steps taken by the central bank in favor of depositors and defaulters to make their repayments easier. For instance, the RBI on June 8, 2023, released a Framework for Compromise Settlements and Technical Write-offs that increased defaulters' flexibility to restructure loans. This allowed smaller payments, helping their financial recovery and extended repayment periods, thus easing debt management. Borrowers who do compromise settlements with lenders can reapply for fresh loans after a 12-month cooling period.
Further, if you are a defaulter who wants to know the rights available to you, read here - Know Your Rights as a Loan Defaulter.
Full Text: "The Reserve Bank of India (RBI) has noticed certain misleading advertisements enticing borrowers by offering loan waivers. These entities seem to be actively promoting many such campaigns in the print media as well as social media platforms.
There are reports of such entities charging a service/legal fee for issuing ‘debt waiver certificates’ without any authority. It has also come to our notice that in certain locations, campaigns are being run by a few persons, which undermines the efforts of Banks in enforcing their rights over the securities charged to the Banks.
Such entities are misrepresenting that dues to financial institutions including banks need not be repaid. Such activities undermine the stability of financial institutions and, above all, the interest of the depositors. It may also be noted that associating with such entities can result in direct financial losses. Members of the public are cautioned not to fall prey to such false and misleading campaigns and report such incidents to law enforcement agencies."
