The Reserve Bank of India has proposed stringent new guidelines to prevent harassment and ensure fair treatment of borrowers during loan recovery. Under the draft norms, banks and recovery agents will be strictly prohibited from using abusive language, threats, excessive calls, anonymous messages, public humiliation, or misleading representations about debt consequences. Recovery calls and visits will be permitted only between 8 am and 7 pm, and agents must avoid contacting borrowers during sensitive occasions such as bereavement, family emergencies, marriages, or festivals.
Banks must set up dedicated grievance redressal mechanisms and cannot assign recovery cases if a complaint is pending, unless found frivolous. Recovery agents will be required to undergo training and certification from the Indian Institute of Banking and Finance.
The draft also mandates transparency, including displaying empanelled agents’ lists and informing borrowers of any changes. Feedback on the proposals is open until March 4, and the guidelines are expected to come into effect from July 1.
RBI Drafts Tough Guidelines to Curb Harassment by Bank Recovery Agents
