Amid rising complaints involving coercive practices, intimidation, abusive calls and public humiliation, the Reserve Bank of India (RBI) has further tightened and consolidated recovery norms in 2026. As a result, loan recovery agents cannot harass borrowers or make their personal lives difficult.
It is vital to note that the revised framework will come into force on 1 October 2026. Especially the consolidated rules governing recovery agents, borrower contact, disclosure requirements, call recording, grievance redress, and the new mobile-device restriction provisions for financed devices.
It places greater responsibility on banking institutions and NBFCs for the conduct of both outsourced and in-house recovery agents.
The draft guidelines for agents were first announced in February, with the central bank proposing to restrain bank employees or recovery agents from using harsh methods towards loan recovery, as detailed in a report by The Hindu.
Key RBI rules borrowers should know
Recovery agents may contact borrowers only between 8 AM and 7 PM, unless the borrower expressly permits otherwise. This is essential to fostering a healthy environment for conversation between lenders and borrowers.
Agents cannot use:
- Threatening or abusive language against borrowers.
- Cannot force intimidation or harassment on .
- Excessive calling, disturbing or messaging.
- Strict restrictions against social media shaming or public humiliation
Recovery agents are barred from harassing:
- Near and dear ones and family members of a borrower.
- Office or working colleagues.
- Neighbours or associated individuals.
- Friends or near relatives.
This applies, unless they are . Even if they are guarantors, they must still be treated with utmost respect. Banking institutions must disclose the identity, authorisation details and empanelled recovery agencies before initiating recovery action. The banks will have to compensate borrowers at a rate of ₹250 per hour for wrongful device blocking.
Recovery-related calls must be recorded and preserved for at least six months, and borrowers must be informed that calls are being recorded. Recovery agents visiting borrowers must carry identity cards, authorisation letters and copies of bank notices during recovery visits.
Banks must notify borrowers of recovery visits by SMS, email, or written communication within the timelines prescribed by the RBI. The RBI framework also bars lenders from assigning recovery cases while borrower grievances related to dues or recovery practices remain unresolved.
For technology-based recovery tools, banks cannot remotely disable a borrower’s mobile device unless the financed device was purchased under the loan agreement and the borrower has been past due for 90 days after due notice.
Even in such cases, lenders cannot block essential services such as internet access, incoming calls, emergency SOS features or government emergency alerts.
Loan default is generally a civil matter, meaning recovery agents cannot threaten arrest or use coercive tactics, abusive language, or other unreasonable methods without due legal process. Consumer courts and Indian courts have repeatedly criticised lenders for unethical recovery behaviour.
Can recovery agents harass borrowers?
Therefore, it can be stated that, with continuous amendments and improvements to RBI rules and regulations on borrower rights and obligations, a recovery agency cannot harass a borrower.
Still, on your part, as a sensible borrower, do keep in mind that you should only borrow funds that you can repay on time. If you are having difficulty meeting your debt obligations, reach out to your lender and explore . Open communication is key here.
Furthermore, borrowers have both rights and obligations towards meeting their debts. You should ensure you follow standard protocols and fundamental rules, and promptly highlight any bad behaviour or difficult experience.
Where can you complain as a borrower?
Borrowers facing harassment can complain to the lender’s grievance redressal officer, escalate unresolved cases through the , or approach police authorities in cases involving threats, intimidation or unlawful recovery practices.
As a sensible borrower, it is your responsibility to ensure that your rights are protected. To further strengthen your relationship with your banking partner, ensure you repay your loans and borrower funds on time. Avoid missing due dates, as it can negatively impact your credit profile, credit score, and future borrowing potential.
In case you are forced to face serious recovery issues by any particular lender, it is best to seek proper legal advice and discuss the issue with your lender so as to resolve the problem amicably.
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