Introduction:
The Bombay High Court has called upon the Reserve Bank of India (RBI) and the Union Government to examine the need for a clear regulatory framework governing private entities that advertise debt-management services and promise borrowers relief from outstanding loans. The Court observed that a distinction must be drawn between legitimate assistance, such as loan restructuring and settlement support, and misleading campaigns that induce borrowers to believe that their repayment obligations can be completely extinguished.
A Division Bench comprising Justice Bharati Dangre and Justice Ashish S. Chavan made these observations while hearing a writ petition filed by Bajaj Finance Ltd. against the Union of India and other…