RBI New Rules for Loan Recovery: Reserve Bank of India (RBI) has asked banks to make a code of conduct for recovery agents, so that they behave sensitively with the borrowers.
RBI Rules for Loan Recovery: Now the recovery agents of the bank will not be able to harass you by calling you at odd hours for loan recovery. Along with this, giving any kind of threat to the lenders will be completely prohibited. The Reserve Bank of India (RBI) on Thursday proposed to tighten the standards for recovery of outstanding loans. Under this, financial institutions and their recovery agents cannot call borrowers before 8 am and after 7 pm.
RBI’s ‘Draft Master Direction on Managing Risks and Code of Conduct in Outsourcing of Financial Services’ states that regulated entities (REs) like banks and NBFCs should not outsource key management functions. should do. These functions also include policy formulation and determination of compliance with KYC norms and sanction of loans.
Banks should make code of conduct for recovery agents
RBI said that REs should ensure that their responsibilities towards customers are not diminished by outsourcing arrangements. According to the draft, banks and non-banking financial companies (NBFCs) should frame a code of conduct for direct selling agents (DSA), direct marketing agents (DMA) and collection agents.
Recovery agents should be sensitive with lenders
Regulated entities should ensure that DSAs, DMAs and recovery agents are appropriately trained so that they can discharge their responsibilities with sensitivity.
The central bank said that REs and their recovery agents will not resort to any form of threat or harassment, whether verbal or physical, against any person to recover the loan. Along with this, recovery agents cannot publicly humiliate the borrowers nor interfere in their privacy.
