Debt Solutions
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Reference guide DMP
Are Debt Management Plans (DMPs) RBI-approved? Are they legitimate?
Anonymous
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Expert answer
Debt Management Plans are not directly regulated by the RBI, but debt counselling — including negotiating with creditors for a repayment plan — has been encouraged by the RBI.
An RBI working group report (3 April 2008) recommended that people in debt should be offered debt counselling, which includes negotiating with creditors to set up a Debt Management Plan.
How a DMP works:
- Assessment — a counsellor reviews your debts, income and expenses.
- Disposable income — earnings minus essential expenses = what you can realistically pay.
- Negotiation — the agency asks your banks and NBFCs for lower rates and penalty waivers.
- One payment — a single monthly payment instead of several EMIs.
- Coaching — budgeting guidance so debt doesn't build up again.
Be careful: legitimate providers don't promise instant results or tell you to stop paying creditors without a plan. Be wary of anyone who does.
SA
SingleDebt Advisor
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