Archive · 7 Aug 2026
RBI recovery agent policy guidelines effective from January 2027
The Reserve Bank of India, also called the RBI, is the central bank of India.
It makes rules for banks and lenders.
Lenders sometimes use recovery agents to collect loan payments from people who borrowed money.
The RBI has made new rules about these recovery agents.
Under the new rules, banks must have a recovery agent policy that the RBI approves.
The rules will start on January 1, 2027, giving banks time to get ready.
Some recovery agents must get a certificate from a special institute before they can meet borrowers.
The rules do not apply to bank employees who collect money or to law firms.
When a phone is bought on a loan, lenders can lock it if payments are not made, but the locking software must be checked by the phone's maker.
Borrowers must still be able to use their phones for work, incoming calls, and messages.
The RBI's revised directions on loan recovery and recovery agent engagement will take effect on January 1, 2027, extended from the earlier proposed October 1, 2026.
Regulated entities newly covered by certification requirements get an additional one year for existing recovery agents to obtain IIBF certification.
The rules do not apply to banks' own employees, collection agents handling regular instalments, or law firms issuing notices and representing lenders in court.
Device-locking software on financed mobile devices must be certified by the original equipment manufacturer or operating system platform provider.
The RBI withdrew the proposal to publish individual recovery agent details, but lenders must still publish empanelled recovery agency details and update them within seven days.
- Who
- The Reserve Bank of India (RBI), regulated entities such as banks, recovery agents, and the Indian Institute of Banking and Finance (IIBF).
- What
- Revised RBI directions on loan recovery and recovery agent engagement, including certification requirements and rules for technology-based restrictions on financed mobile devices.
- When
- January 1, 2027, extended from the earlier proposed October 1, 2026.
- Where
- India.
- Why
- To give lenders more time for technical and operational changes, standardize recovery agent certification, and address stakeholder feedback on the draft directions.
- Regulator
- Reserve Bank of India (RBI)
- Effective date
- January 1, 2027 (extended from October 1, 2026)
- Certification body
- Indian Institute of Banking and Finance (IIBF)
- Transition period
- One additional year from the effective date for existing agents of newly covered entities
- Exemptions
- Banks' own employees, agents collecting regular instalments, and law firms
- Device restriction timeline
- Restrictions cannot start before 30 days overdue; full restrictions after 60 days past due
- Compensation cap
- Wrongful device restriction or delay compensation capped at the amount of loan disbursed
- Agent disclosure
- Individual agent details withdrawn; agency details published and updated within 7 days
