Nowadays, obtaining a loan is relatively easy, but sometimes borrowers are unable to pay their EMIs on time due to various reasons. In such situations, lenders may employ recovery agents to recover the outstanding
amounts. Recently, there have been numerous reports of agents calling repeatedly, pressuring, or threatening borrowers.
If you face such issues, there is no need to worry. The Reserve Bank of India (RBI) has issued strict guidelines for banks and NBFCs regarding loan recovery to ensure borrowers are treated fairly. These rules protect your dignity and privacy and outline steps you can take if recovery agents violate them.
What Can Recovery Agents Not Do?
RBI guidelines specify that the recovery process must be conducted politely and legally. This means recovery agents are prohibited from:
- Using threats, abusive language, or intimidation.
- Making rude, insulting, or mentally stressful remarks.
- Calling repeatedly, particularly late at night or early in the morning.
- Embarrassing you in front of family, colleagues, or neighbours.
- Threatening physical harm or seizing property.
Any of these actions constitutes a violation of RBI rules.
What Recovery Agents Can Do?
- Recovery agents can only contact borrowers between 8 am and 7 pm. Calls outside these hours are considered harassment.
- Agents must always introduce themselves and clearly state the bank or NBFC they represent.
- Recovery agents are forbidden from sharing your personal loan information, including outstanding amounts, with third parties such as neighbours, colleagues, or relatives.
- Posting such details on social media, WhatsApp groups, or public forums is a serious breach of RBI rules.
- Even if recovery agents are third-party contractors, the bank or NBFC is responsible for their actions. Banks must ensure agents are properly trained and follow the prescribed code of conduct.
- Complaints must be investigated promptly, and corrective action taken accordingly.
What To Do If You Are Harassed By Recovery Agents?
- Collect Evidence: Save call recordings, messages, WhatsApp chats, or gather witness accounts if possible.
- Complain to the Bank or NBFC: Contact customer care via phone, email, or submit a written complaint. Ensure you receive a complaint number or reference.
- Escalate to RBI: If the bank does not resolve the issue, file an online complaint through the RBI Complaint Management System (CMS). Banks must respond within a specified timeframe.
- In Case of Threats or Violence: Contact your local police immediately.
Options If You Cannot Pay Your EMI
RBI not only safeguards borrowers’ rights but also suggests practical solutions:
- Restructuring: Request a reduction in EMI amounts or an extension of the loan period.
- Moratorium/Grace Period: Temporary relief where available.
- Settlement: Agree to pay a lump sum amount, but ensure it is in writing.
Always maintain written communication with the bank and keep copies of any agreements.
What To Avoid
- Do not pay recovery agents in cash; only use authorised bank channels.
- Do not hand over documents to anyone without proper ID or official written notice.
- Do not agree to unfair terms under pressure or fear.
RBI rules ensure that borrowers are treated with respect and dignity. If you are being harassed by recovery agents with repeated calls, threats, or pressure, these regulations protect you. Acting promptly, filing complaints correctly, and maintaining evidence are your strongest tools in defending your rights.
