It is now difficult to take a personal loan; RBI at the grassroots level of common people

Most of the people in India are surviving by taking loans like home loan, education loan, employment loan and loan for car and bike. More and more people are purchasing personal loans called purse loans. They are taking personal loans especially for various expenses including emergency medical expenses.

Many private financial institutions including private banks in India provide personal loans. Most people buy personal loans due to low interest and low EMI. Many of them take a loan from another company before the personal loan from one personal finance company is finalized.

RBI control

In this case, the Reserve Bank of India (RBI) has come up with new restrictions to rein in personal loan buyers in India. In other words, the Reserve Bank has ordered private financial institutions and banks to report the credit records, including credit scores, of those purchasing personal loans every 15 days from now on.

These restrictions of RBI will come into effect from January 1. Due to this, any personal loan will now come under strict scrutiny. Since the credit score is checked every 15 days, people who have taken a personal loan at one location cannot take a personal loan at another location without repaying it in full.

credit score check

Economists say that RBI has taken this new step to improve the credit risk assessment system and its aim is to curb unnecessary borrowing. Due to the strict rules of RBI, the practice of personal loan will stop to a great extent this year.

By checking the credit records including credit score every 15 days, lending institutions can act by knowing the repayment capacity of the borrowers.

impact on common people

While the Reserve Bank had announced this order in August last year, it has come into effect from the first day of the new year. This order of RBI is like placing a hand on the waist of common people. Because in India, it is the poor, poor and middle class people who buy the most personal loans.

These personal loans help them with festive expenses and emergency medical expenses. Now RBI has banned this also which is a problem for the common people.