RBI gets serious on loan recoveries

Reserve Bank of India has released draft guidelines aimed at curbing harassment by loan recovery agents of banks and finance companies. The proposed rules seek to ensure respectful behaviour toward customers and prevent threats, intimidation, and late night calls during recovery processes.

Under the new draft norms, recovery agents must meet mandatory eligibility criteria, and calls to borrowers will only be allowed between 8 a.m. and 7 p.m. Banks and finance companies will also be held responsible for any harassment caused by agents. The draft additionally bans misuse or leakage of customers’ social media data. RBI will take a final decision after receiving public feedback on the proposals.