RBI Imposes Strict Rules to Curb Harassment by Recovery Agents; What to Do If They Show Up at Your Door

The Reserve Bank of India has issued stringent draft guidelines to curb harassment by loan recovery agents. Here’s what borrowers must know and how to respond if agents contact them.

Pune | 13 February, 2026- The Reserve Bank of India (RBI) has introduced stringent draft guidelines aimed at curbing harassment and unethical practices by loan recovery agents. The move comes amid rising complaints from borrowers about aggressive collection tactics, including threatening calls, intimidation, and public embarrassment. The proposed framework seeks to ensure that borrowers are treated with dignity, fairness, and transparency during the loan recovery process.

Under the new draft rules, banks and financial institutions will be held directly responsible for the conduct of their recovery agents, including third-party agencies. Recovery personnel will be strictly prohibited from using abusive language, issuing threats, repeatedly calling borrowers, or contacting their relatives, friends, or workplace colleagues to exert pressure. The guidelines also restrict agents from misrepresenting the amount due or exaggerating the legal consequences of non-payment.

A key feature of the proposed rules is the limitation on contact hours. Recovery agents will only be permitted to contact borrowers between 8:00 a.m. and 7:00 p.m. Calls or visits outside this time window will be considered a violation. Banks must also inform borrowers in advance—via SMS, email, or written notice—about the name and contact details of the authorised recovery agent assigned to their case.

The RBI has emphasized the need for proper documentation and accountability. Financial institutions must maintain detailed records of all communications between recovery agents and borrowers. Additionally, banks must establish a dedicated grievance redressal mechanism specifically for complaints related to recovery practices. Borrowers should be clearly informed about how and where to file complaints if they face misconduct.

Importantly, if a borrower has already lodged a complaint with the bank regarding their loan account, the case should not be handed over to a recovery agent until the grievance is resolved, unless the complaint is found to be baseless. This provision aims to prevent undue harassment while disputes are under review.

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