Loan Rule changed: Now the problems of those who take more than one or repeated loans are going to increase. Recently RBI has changed this rule. Banks and financial institutions giving loans to those who take more than one personal loan repeatedly will now have to update the credit bureau record of such customers within 15 days.
Earlier this was done in a month. The Reserve Bank says that this will help in better assessing the risk of loan takers.
According to the information received, experts say that the loan installment (EMI) is paid on different dates in a month. Updating the credit record once a month can delay the installment or showing the payment information by up to 40 days.
By updating more often, loan giving institutions will be able to get the correct information about default in time.
Loans will be controlled
According to the information, finance companies say that this change will also stop the cases of ‘evergreening’. In this, the loan taker takes a new loan in case of not being able to repay the old loan. This increases their total loan amount. In this way, borrowers are never able to repay their old loan completely and the loan burden on them keeps increasing.
Instructions were issued
According to the information received, RBI had issued this instruction in August and gave loan giving companies and credit bureaus time till January 1 to update their system. Experts say that when new borrowers take loans, many times they take multiple loans at once, which makes it difficult to repay them.