The Reserve Bank of India (RBI) raised caution on Monday about misleading ads that entice borrowers by providing debt exemptions. According to reports, such firms charge a service/legal fee for providing ‘debt waiver certificates’ lacking authority. According to the RBI, these firms appear to be actively supporting many similar initiatives in newspapers as well as on social media.
The public is advised not to fall victim to such deceptive and misleading efforts and to report such cases to law enforcement officials, according to the central bank. “It has also come to our attention that in certain locations, campaigns are being run by a few individuals, undermining Banks’ efforts to enforce their rights over the securities charged to the Banks.”
Such businesses falsely state that dues to financial institutions, including banks, do not need to be returned. Such acts jeopardize the stability of financial institutions and, more importantly, the interests of depositors. Associating with such entities may also result in direct financial losses,” the RBI statement continued.
The RBI Governor-led MPC maintains the repo rate at 6.50%.