Caution against unincorporated Lenders

Lending and borrowing is common in today’s world. There are number of banks and financial institutes come up with new scheme or offer to attract borrowers or customers. RBI cautioned public to verify the credentials before dealing with unincorporated lenders.

RBI caution public to verify the credential of bank or institutes before approaching for personal loan or paying processing fee for them. It is recommended to deal with bank or institutes who have years of experience in lending loans and advances such as personal loan, car loan and other long term loans.

The central bank said it noticed that certain entities are issuing a spate of advertisements in newspapers offering personal loans, loans against property and other loans, at a very low rate of interest. In the advertisements, these entities indicated their mobile phone numbers for the prospective borrowers to correspond, the bank added.

It has also come to the notice that some of these entities are cheating the public by charging processing fees upfront and disappearing thereafter. Reserve bank cautioned public before dealing with unincorporated lenders. Borrowers are advised to exercise utmost caution and verify the credentials while dealing with them.

Reference

RBI cautions public against unincorporated loan providers