An End to Harassment?
For years, many borrowers in India have shared stories of aggressive and often abusive tactics from recovery agents. Intimidating calls at all hours, threats, and public humiliation have been common complaints. In response to this, the RBI has stepped
in with a comprehensive framework designed to clean up the process and protect the dignity of borrowers. These new rules, effective from January 1, 2027, are not just suggestions; they are mandatory guidelines for all regulated banks and lending institutions, making them directly accountable for the actions of their recovery agents.
The Game-Changer: Mandatory Call Recording
The most significant change is the mandate for banks to record all recovery-related conversations with borrowers. This includes calls made by agents to borrowers and calls made by borrowers to the contact numbers provided by the bank. These recordings must be preserved for at least six months. In cases where a complaint or dispute is pending in a court or another authority, the recordings must be kept until the matter is resolved. This creates an official record of every interaction, moving disputes from a 'he said, she said' scenario to one based on verifiable evidence.
How This Empowers You as a Borrower
This new rule on recorded calls is a powerful tool for consumer protection. If a recovery agent uses abusive language, makes threats, or misrepresents facts, it will now be on record. This evidence can be crucial if you need to file a complaint against the agent or the bank. The rules explicitly prohibit harassment, including threatening language, excessive calling, public humiliation, and contacting your relatives or friends about the debt. With calls being recorded, there is a stronger deterrent against such behaviour, as agents and banks know their actions are being documented.
Your Rights During a Recovery Call
Under the new framework, your rights are much clearer. Recovery agents can only contact you between 8 a.m. and 7 p.m., unless you agree to a different time. They must identify themselves and the agency they represent, and they cannot contact you from an anonymous number. Before a recovery agent even visits, the bank must inform you who they are. When visiting, agents must carry an official identity card and a letter of authorisation from the bank. The new rules also give you the right to have your complaints addressed through a dedicated grievance redressal mechanism established by the bank.
What About Digital Harassment?
The RBI has also addressed modern forms of pressure, such as the remote locking of smartphones financed through loans. This is now heavily restricted. Lenders can only consider disabling a device if the loan was taken specifically for that device. Even then, they cannot impose any restrictions until the loan is 30 days overdue, and a full restriction is only possible after 60 days of non-payment. Crucially, essential functions like incoming calls and emergency services cannot be disabled. Furthermore, lenders are explicitly forbidden from publishing a borrower's personal details on social media as a shaming tactic.
