The Reserve Bank of India’s Deputy Governor, M. Rajeshwar Rao, has raised concerns about people taking too many unsecured loans and the growing excitement around risky trading in the stock market. He said that borrowing too much without security can be dangerous for both individuals and banks. He also warned that many investors are getting carried away with trading in complex financial products like derivatives, which can lead to big losses.
Speaking at a conference at IIM Kozhikode, Rao said financial companies must make sure customers understand the risks before they take loans or invest in risky products. Many people focus on making quick money and forget about long-term financial security. He stressed that increasing financial awareness will protect people from fraud and also help banks and lenders gain trust.
Rao also talked about the Unified Lending Interface (ULI), a digital platform that helps in quick loan disbursal. As of December 6, 2024, over 6 lakh loans worth ₹27,000 crore had been given through ULI. Out of this, 1.6 lakh loans worth ₹14,500 crore were provided to small businesses. Last month, RBI’s Chief General Manager Suvendu Pati said that 7.5 lakh loans worth ₹38,000 crore had been given through ULI in total.
He added that while digital lending is helping businesses grow, financial companies must follow rules and ensure responsible lending. The RBI and other regulators are working to improve financial education so that customers can make better decisions and avoid risky investments.
