RBI imposes stricter loan‑recovery rules to curb borrower harassment

The Reserve Bank of India (RBI) has issued new loan‑recovery guidelines that will take effect on 1 January 2027. The rules apply to all commercial banks, non‑banking financial companies (NBFCs) and other regulated lenders. Recovery agents will be prohibited from threatening, harassing, or humiliating borrowers, and they may not disclose personal information to family, friends or colleagues. Calls to borrowers are limited to the window of 08:00 – 19:00, and agents must carry identification and a bank‑issued authorization letter. Banks must publish a list of authorized agents on their websites, record all recovery calls for at least six months, and set up separate grievance mechanisms. Violations will trigger compensation obligations for the banks.

These measures aim to protect borrower dignity and privacy while maintaining the integrity of loan‑collection processes across India.