What to do if a recovery agent comes to your home: What RBI rules mean for borrowers

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When borrowers default on personal loans, banks and NBFCs typically employ the services of recovery agents. The Reserve Bank of India allows lenders to hire such agents but has specified strict guidelines to prevent harassment. These guidelines emphasize dignity, privacy, and fairness so that even in case of default in a loan, borrowers are not subjected to illegal or oppressive practices.

RBI rules closely regulate the time and way recovery agents can contact borrowers. During daytime office hours of 7 a.m. to 7 p.m., except in exceptional circumstances, calls or visits are allowed. This has been done to prevent borrowing at unusual hours or late night harassment of borrowers. Any such violation can be reported to the lender personally, and borrowers are free to approach the regulator with such complaints too.

Agents are prohibited from threatening borrowers, using abusive language, or publicly shaming them. Visits to workplaces or residences must be discreet and respectful, avoiding embarrassment in front of family or colleagues. Borrowers facing misconduct can lodge formal complaints with the lender, and if unresolved, approach the RBI’s grievance redressal channels.

Borrowers are entitled to complete information of their payments, repayment plans, and settlement processes. In case you are approached by a recovery agent, you may require identification and written proof of the loan payable. This is in a bid to prevent fraud since impersonators sometimes pose as agents to extort money. The RBI compels lenders to ensure that only real representatives contact customers.

In case of repeated harassment, intimidation, or violation of guidelines, the first step is to document all interactions—dates, times, and behaviour. Borrowers should then file a written complaint with the lender’s grievance redressal officer. If unsatisfied with the response, they can approach the Banking Ombudsman or use RBI’s Complaint Management System for resolution.

While the RBI guidelines aid the borrowers, they do not exempt them from loan repayment. Borrowers should communicate with lenders in case of actual repayment difficulty and request restructuring, settlement, or postponements. Open communication not only reduces recovery agent pressure but also maintains credit ratings in the long term.

Borrowers need to ask for identification and ensure the person is an authorized representative. In the event the visit is aggressive or violates RBI guidelines, a complaint has to be filed immediately with the lender and, if not heard, with the regulator.

No. RBI rules prohibit contact outside office hours, i.e., 7 a.m. to 7 p.m. Out-of-hour calls or visits are against RBI norms and can be complained about.

No. These restrictions don't do away with repayment obligations. Borrowers will need to repay the loans within time, but the guidelines permit the process to be legal and respectful.