 "Lack of supervision It would have been much better if the RBI's central board had highlighted where the existing departments fell short and then suggested a remedy")
The RBI might not provide any relief to people from pesky telecallers from Non Banking Financial Companies (NBFCs) offering loans as it said they create "awareness" about their products and banning them may not be the "ideal way out", according to an RTI response.
In a note sheet made public under the RTI, the Reserve Bank of India (RBI) said the "honus should be on the borrower" to exercise "due diligence" and understand the terms and conditions before availing loans offered through such calls.
The banking regulator has also rejected suggestions given by RTI activist Subhash Agrawal on operations of NBFCs, like to ban calls luring customers for unsecured loans, capping interest rates and putting a ban on financing of NBFCs by banks.
Agrawal, who had raised these concerns on the government's online grievance portal 'Centralized Public Grievance Redress and Monitoring System (CPGRAMS)', recently filed an RTI to know what action had been taken on his suggestions.
"NBFCs lure people through mobile calls for granting unsecured loans on post dated cheques or banking instructions for auto electronic clearing. When borrowers are not able to pay they are tortured," he had said.
The RTI activist had suggested that unsecured loans and mobile calls to people for such loans should be banned or terms and conditions should be regulated so that these may not become suicidal for borrowers in case of difficulties.
In response to his application, the RBI provided the note sheet and gave reasons to reject his suggestion.
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"As regards, banning mobile calls for luring customers for loans, telephone and mobile calls are a general marketing and advertising tactic deployed by NBFCs.
"In the process, it also creates awareness about various products, their features for the customers," the policy wing of the RBI's central office noted.
It said it is "debateable" if customers are compelled by such calls to take loans.
On the unsecured loans issue, the RBI said they are typically offered for medical emergencies, education and marriages among others where the "loan ticket" size is not very high.
"It may not be always possible for prospective borrowers to offer security for availing loans and there is a genuine need for unsecured loans as one of the products in the overall kitty," it said.
NBFCs should be allowed to offer unsecured loans as per their risk appetite and assessment of credit worthiness of the borrower, the RBI noted.
"In view of these considerations banning unsecured loans or mobile calls completely or regulating terms and conditions thereof will not be logical," it said.
