Loan recovery agents are instructed by the RBI not to call before 8 am or after 7 pm

These amendments have broadened the standards’ application while limiting the times that borrowers may be reached by phone to collect past-due debts.

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The RBI published new guidelines on Friday prohibiting recovery agents from intimidating customers and from phoning them before 8 am and after 7 night.

Reserve Bank of India (RBI) stated that it has noticed that recovery agents are deviating from its directions with regard to the recovery of loans while issuing extra instructions to regulated businesses including banks, NBFCs, and ARCs.

“It is advised that the REs (regulated entities) shall strictly ensure that they or their agents do not resort to intimidation or harassment of any kind, either verbal or physical, against any person in their debt collection efforts,” ​the ​RBI said in a notification.

In addition, it requested that they refrain from phoning the borrower before 8 am or after 7 pm to collect past-due loans and from sending them improper messages or making anonymous or threatening calls.

The RBI periodically issues instructions as part of the Fair Practices Code (FPC), and has previously cautioned REs that they should refrain from intimidating or harassing their clients by, for example, phoning them on the phone at strange hours when trying to recover a debt.

The banking regulator claimed that in issuing these extra instructions to REs, it took into account a number of recent developments, including an increase in the frequency of unethical behaviour by RAs (recovery agents).

These amendments have broadened the standards’ application while limiting the times that borrowers may be reached by phone to collect past-due debts.

All commercial banks, including local rural banks, cooperative banks, non-banking financial companies (NBFCs), asset reconstruction companies (ARCs), and all Indian financial institutions will be subject to these guidelines, according to the RBI.