Now Reading: RBI sets new loan recovery rules to end borrower harassment
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RBI sets new loan recovery rules to end borrower harassment
The Reserve Bank of India (RBI) has issued a comprehensive framework to curb harassment by loan recovery agents, effective January 1, 2027. Banks must inform borrowers of the agent's name and contact…
The Story in Brief
The Reserve Bank of India (RBI) has issued a comprehensive framework to curb harassment by loan recovery agents, effective January 1, 2027. Banks must inform borrowers of the agent's name and contact details before recovery begins. Agents cannot make anonymous calls, use abusive language, or visit between 7 PM and 8 AM without consent.
For financed smartphones and laptops, lenders cannot remotely lock devices until the loan is 30 days overdue. Full restriction is allowed only after 60 days, with essential functions like incoming calls and SMS preserved. If a locked device is not restored within one hour of repayment, the borrower is entitled to ₹250 per hour of delay, capped at the loan amount. Agents must obtain certification from the Indian Institute of Banking and Finance before engaging with borrowers.
The Indian Opinion
This is a welcome check on the brute-force recovery tactics that lenders and their agents have used for years. The real test lies not in the rulebook but in enforcement: will RBI actually impose the ₹250-per-hour penalty on recalcitrant banks, or will this become another 'good intention' gathering dust? The answer lies in the first batch of grievance redressal data after January 2027.
Sources (4): indiatvnews.com, odishatv.in, livemint.com, rediff.com
This story was synthesised by AI from the 4 sources linked above.
Updated: this story now draws on 4 sources.
