RBI flags false loan waiver claims by some, warns of legal action

MUMBAI: The Reserve Bank of India (RBI) on Monday expressed fresh concerns over unauthorized campaigns falsely promising loan waivers, warning that they pose serious risks not only to individual borrowers but also to the stability of the broader lending system underpinned by credit discipline. He warned that organizations running such campaigns could face legal action.The central bank underlined its “serious concerns” about some individuals and organizations providing misleading aid through social media and direct channels, offering to secure loan waivers or issuing so-called loan waiver certificates in exchange for a fee.

In its statement, the RBI warned that these entities often charge borrowers legal or service charges to secure relief from existing debt commitments.
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The RBI warned that such campaigns could mislead borrowers into believing that their liabilities could be written off outside formal processes, which could affect repayment behavior and weaken credit discipline. The statement said, “Such campaigns both mislead the public and prevent the regular functioning of the country’s credit system.”