Loan Recovery Agents Should Not Harass Borrowers For Overdue Loans: RBI

Amid increasing complaints with regard to unjust recovery policies together with strong-arm practices employed by loan recovery agents, the apex banker-RBI on Friday asked financial institutions that come under its ambit to ensure that recovery agents do not harass borrowers for loan recovery.

The notification by the RBI in this regard said, "it is advised that the REs shall strictly ensure that they or their agents do not resort to intimidation or harassment of any kind, either verbal or physical, against any person in their debt collection efforts, including acts intended to humiliate publicly or intrude upon the privacy of the debtors' family members, referees and friends, sending inappropriate messages either on mobile or through social media, making threatening and/ or anonymous calls, persistently calling the borrower and/ or calling the borrower before 8:00 a.m. and after 7:00 p.m. for recovery of overdue loans, making false and misleading representations, etc".

Any violation in this regard by REs or regulated entities will be viewed seriously, said the RBI.

Also, the apex bank is acting strictly against spurious business activity being resorted to by digital lenders. The RBI on Wednesday issued guidelines for online lending platforms that was aimed to address wrongful conduct by illicit Chinese apps.