RBI mulls last chance for loan defaulters
The RBI is mulling over a proposal that will allow loan defaulters a last chance to repay their debts before surrendering possession of mortgaged property. It recently released the second draft of it’s guidelines on recovery agents, saying the measures taken by lenders must follow the spirit of the Indian Contract Act.It has also proposed that a record of telephone discussions between recovery agents and customers be maintained.
This seems like a step in the right direction, though I personally feel there has to be a strict check at the time of disbursing the loan itself. There are numerous instances of consumers taking multiple loans from various banks, but without adequate capacity to repay. Unless there is control over this, defaults will continue to be the bane of financial lending institutions, regardless of measures such as the above.
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