RBI Updates Rules for Personal Loans
In today’s inflation-driven economy, personal loans have become a common way to meet financial needs. While they are easily accessible, even a single missed or delayed installment can lead to serious consequences.
Impact on Credit Score
Personal loans are approved based on credit scores. Missing an installment can harm your credit score, making future loans difficult or impossible to secure. A poor credit score may even disqualify you from getting loans altogether.
Legal Consequences
Failure to repay loans can lead to legal action. Banks and financial institutions may approach civil courts to recover dues, potentially through property attachment. If a borrower is suspected of intentional non-payment, they could face criminal charges under Section 420, which might even result in jail time.
New RBI Rules for Personal Loans
The Reserve Bank of India (RBI) recently introduced updated rules to enhance transparency and fairness in personal loan practices. Key changes include:
Notice Before Calls: Banks must issue a notice before contacting borrowers at their homes in case of default.
Behavioral Norms: Employees and recovery agents must adhere to respectful behavior with borrowers.
Compensation for Harassment: Banks will compensate customers if recovery agents engage in harassment.
These measures aim to protect borrowers while ensuring ethical loan recovery practices.
Reader / Viewer discretion and disclaimer :
The information provided on SMEConnect (www.smeconnect.in) website is intended for general informational purposes only. While we strive to provide accurate and up-to-date information, we cannot guarantee the accuracy, completeness, or reliability of the content. The views and opinions expressed in the articles and posts on this website are those of the authors and do not necessarily reflect the official policy or position of SMEConnect website. Readers are advised to independently verify any information found on this website before making decisions based on it. We do not endorse, represent, or warrant the accuracy or reliability of any third-party content linked on this site. Furthermore, SMEConnect (www.smeconnect.in) website shall not be held liable for any errors, omissions, or delays in the information provided, nor for any losses, injuries, or damages arising from its display or use. Please note that the content on SMEConnect (www.smeconnect.in) website may be subject to change without notice.
