The Reserve Bank of India (RBI) issued a caution on December 11, alerting the public to unauthorised campaigns promoting loan waivers. The central bank urged people to remain vigilant against false campaigns and report any such incidents to law enforcement.
The RBI’s warning follows the observation of misleading advertisements that entice borrowers with promises of loan waivers. In a statement released today, the RBI noted that these entities actively promote such campaigns through print and social media, charging fees for issuing ‘debt waiver certificates’ without proper authority.
Additionally, the RBI highlighted campaigns in certain locations that undermine banks’ efforts to enforce their rights over securities charged to them.
The central bank emphasised that these entities misrepresent information, suggesting that dues to financial institutions, including banks, do not need repayment. Such activities pose a threat to the stability of financial institutions and the interests of depositors, leading to potential financial losses for those associating with such entities.
The RBI’s caution comes in the wake of repeated promises of loan waivers by political parties, including the BJP and Congress. These promises, often used as poll strategies, have posed significant risks to the banking system as borrowers may stop repaying their instalments, contributing to a surge in bad loan levels.
