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RBI warns against misleading loan waiver advertisements

The Reserve Bank of India (RBI) issued a strong warning on Monday, cautioning the public about misleading advertisements that promise loan waivers. The central bank expressed concern about entities charging fees for 'debt waiver certificates' without proper authorization.

RBI warns against misleading loan waiver advertisements
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First Published Dec 11, 2023, 1:01 PM IST

The Reserve Bank of India (RBI) issued a stern warning on Monday regarding misleading advertisements enticing borrowers with promises of loan waivers. The central bank expressed concern over reports of entities charging a service or legal fee for issuing 'debt waiver certificates' without proper authority.

These dubious entities are actively promoting such campaigns through print media and various social media platforms, according to the RBI. The public has been cautioned against falling prey to false and misleading advertisements and urged to report such incidents to law enforcement agencies.

The RBI statement highlighted, 'It has come to our notice that in certain locations, campaigns are being run by a few individuals, undermining the efforts of banks in enforcing their rights over the securities charged to them. These entities misrepresent that dues to financial institutions, including banks, need not be repaid.'

The central bank emphasized that such activities pose a threat to the stability of financial institutions and, more importantly, jeopardize the interests of depositors. The statement concluded with a stark reminder that associating with such entities can result in direct financial losses. As the RBI takes a proactive stance against these misleading practices, borrowers are urged to exercise caution and remain vigilant against fraudulent loan-related schemes.

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