Archive · 6 Aug 2026
RBI tightens loan recovery rules, bars harassment, protects borrowers
The Reserve Bank of India is a big bank that makes rules for other banks in India.
It has made new rules about how banks can ask people to pay back money they borrowed.
Borrowing money and paying it back slowly is called a loan.
Sometimes, when people cannot pay on time, banks send agents to collect the money, and these agents are called recovery agents.
The new rules say recovery agents must be polite and cannot shout at, threaten, or embarrass people.
They can only visit borrowers between 8 in the morning and 7 at night.
Banks also cannot lock someone's phone just because they owe money, unless the phone was bought with that same loan.
Even then, they must wait 30 days before restricting anything and 60 days before full restrictions.
If a bank wrongly blocks a phone, it must pay the person ₹250 for every hour the phone was blocked.
These rules make sure people are treated fairly even when they owe money.
The Reserve Bank of India (RBI) has issued new directions requiring banks to adopt a comprehensive loan recovery policy covering triggers, escalation, borrower engagement and due diligence.
Recovery agencies must be vetted by banks, and only agents certified by the Indian Institute of Banking and Finance (IIBF) or an approved institute may conduct recovery work.
Recovery agents must carry identity cards and authorisation letters, visit borrowers only between 8 a.m. and 7 p.m., and avoid contact during bereavement or medical emergencies.
The rules prohibit abusive language, threats, anonymous or excessive calls, public humiliation, social media posts disclosing borrower details, and intimidation.
Banks cannot remotely disable a borrower's phone unless the loan financed that device, may restrict it only after 30–60 days past due, and must compensate ₹250 per hour for wrongful restrictions.
- Who
- The Reserve Bank of India (RBI), along with banks and recovery agencies it regulates
- What
- New rules tightening loan recovery practices, barring harassment and strengthening borrower protection
- When
- Date not specified in the articles
- Where
- India
- Why
- To ensure fair, transparent and non-coercive loan recovery and to protect borrowers from harassment
- Regulator
- Reserve Bank of India (RBI)
- Certification body for recovery agents
- Indian Institute of Banking and Finance (IIBF) or an approved institute
- Advance notice for first in-person visit
- At least one day
- Permitted visit hours
- 8 a.m. to 7 p.m.
- Device restriction triggers
- Partial restrictions after 30 days past due; full restrictions after 60 days
- Compensation for wrongful device restriction
- ₹250 per hour, subject to a maximum equal to the loan amount
- Prohibited practices
- Abusive language, threats, anonymous or excessive calls, public humiliation, social media exposure of borrower details, intimidation
- Grievance redressal
- Dedicated mechanisms with grievance officer contact details in all recovery communications