'No Threats, No Late Night Calls': RBI Issues New Rules For Loan Recovery

The Reserve Bank of India (RBI) has announced comprehensive new rules for loan recovery, set to take effect on January 1, 2027. In a bid to protect borrowers from aggressive recovery practices, the RBI has introduced stricter contact norms that financial institutions must adhere to. These include limiting recovery calls to a time window between 8 am and 7 pm, a move aimed at ensuring that borrowers are not disturbed during late hours. Under the new guidelines, recovery agents are expressly prohibited from making threats or engaging in any form of harassment towards borrowers. This directive is part of a broader effort to foster a more ethical and respectful approach to loan recovery, which has been a contentious issue in recent years. The rules are designed to balance the needs of financial institutions to recover loans with the rights of borrowers to be treated fairly. The RBI's initiative marks a significant shift towards enhancing consumer protection in the financial sector. By implementing these measures, the central bank aims to curb the rising complaints about aggressive recovery tactics. These changes are expected to improve the relationship between lenders and borrowers, ensuring that the recovery process is conducted in a more dignified and humane manner.

— Authored by Next24 Live