RBI issued New Guidelines regarding Loan Recovery; Check Guidelines

The Reserve Bank of India(RBI) has tightened the rules for loan recovery agents. The RBI has issued new guidelines to collection agents, stating that they are not permitted to contact borrowers before 8 a.m. or after 7 p.m. The RBI issued a notification stating that banks, non-bank financial companies (NBFCs), and asset reconstruction companies (ARCs) must ensure that its debt recovery instructions are followed correctly.

The RBI stated that borrowers should not be harassed in any way, should not be provoked, and should not receive any inappropriate messages. Also, no threats should be made, and no calls from unknown numbers should be made.

Furthermore, recovery agents are not permitted to contact any borrower before 8 a.m. or after 7 p.m. This is not the first time the RBI has issued guidelines on the subject. Even before this, the RBI issued guidelines on debt recovery, but incidents have recently come to light. In light of this, these new and extremely stringent guidelines have been issued.

What are the borrower’s rights?

Do you now understand the borrower’s legal rights? First and foremost, understand that if any recovery agent is acting inappropriately, seek the assistance of the police. A recovery agent may not seize anyone’s property. The agent’s role is limited to preparing the borrower for payment.

Under no circumstances may the agent physically, mentally, or otherwise harass the borrower. In addition, the borrower must have the phone number and address of the recovery agent. The loan agent recovery agent’s job is to contact the borrowers and collect payment from them. Loan agents can explain the loan’s terms and conditions to borrowers and charge late fees, but they cannot harass anyone.