The Reserve Bank of India (RBI) is stepping up its efforts to regulate loan recovery agents and protect bank and NBFC customers. The proposed measures aim to create boundaries and ensure respectful practices.

Key Aspects of the RBI Proposal:

No Calls Late at Night: Recovery agents will be restricted from contacting bank and NBFC customers between 7 pm and 8 am. This will offer customers relief during late hours.

No Outsourcing Core Functions: The proposal discourages banks and NBFCs from


outsourcing core management functions like the Know Your Customer (KYC) process and loan approval to regulated entities. This ensures that critical tasks remain within the organization.

Code of Conduct: Recovery agents are required to implement a code of conduct for Direct Sales Agents, Direct Marketing Agents, and Recovery Agents. This code of conduct must gain approval from the board, emphasizing ethical practices.


Training Mandate: Proper training for recovery agents is mandated, focusing on customer interaction, call timing, and customer privacy. This ensures agents act


Anti-Harassment Measures: Recovery agents and their teams are explicitly prohibited from harassing or misbehaving with customers in their pursuit of debt recovery.

The Need for These Measures: These proposals are a response to the persistent issues involving loan recovery agents. Some agents have resorted to aggressive tactics, including sending misleading messages, making threats, and bombarding customers with incessant calls.


The objective is to put an end to such practices, providing customers with a clear timeframe for agent communication, which is between 7 pm and 8 am. This will protect customers from

undue harassment, especially during odd hours.

RBI’s Ongoing Commitment: The RBI has been actively addressing complaints about the behaviour of recovery agents working for NBFCs and banks. While they have previously issued guidelines to banks on this matter, the impact has been limited. Reports of misbehaviour by recovery agents have made headlines, sometimes leading to dire consequences, such as customers taking their own lives due to



This new proposal is part of RBI’s ongoing efforts to establish greater accountability and restraint in the actions of recovery agents. The focus is on ensuring fair and ethical practices when it comes to debt recovery.