MUMBAI: The RBI on Friday issued fresh instructions to recovery agents to intimidate borrowers as well as prevent them from calling them before 8 am and after 7 pm.
While issuing additional instructions to regulated entities including banks, NBFCs and ARCs, Reserve Bank (RBI) stated that it has noticed that the recovery agents are deviating from its instructions regarding recovery of loans.
RBI said, “It is advised that REs (regulated entities) strictly ensure that they or their agents do not resort to any kind of threat or harassment against any person in their loan recovery efforts, either verbally or physically.” in a notification.
It asked them not to send inappropriate messages, threaten or make anonymous calls in any form except to call the borrower for recovery of overdue loans before 8 am and after 7 pm, or to make false and misleading representations .
RBI issued guidelines from time to time fair practice code (FPC), and has already advised REs not to resort to intimidating or harassing their borrowers, calling them at odd hours in their debt recovery efforts.
The banking regulator said that it has taken into account certain recent developments including increasing incidence of unacceptable practices by RAs (Recovery Agents) to issue these additional directions to REs.
These additions have broadened the scope of the guidelines, limiting the hours of phone calls to borrowers for recovery of overdue loans.
RBI said that these instructions will be applicable to all commercial banks (including regional rural banks), co-operative banks. non-banking financial companies (NBFCs), Asset Reconstruction Companies (ARCs) and All India Financial Institutions.
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