RBI orders loan collectors not to intimidate borrowers, no calls before 8 a.m. and after 7 p.m.

The RBI issued new instructions on Friday prohibiting debt collectors from intimidating borrowers as well as calling them before 8 a.m. and after 7 p.m.

While giving further instructions to regulated entities including banks, NBFCs and CRAs, the Reserve Bank (RBI) said it has observed debt collectors deviating from its instructions with regard to loan recovery.

“REs (regulated entities) are advised to strictly ensure that they or their agents do not use any form of intimidation or harassment, verbal or physical, against anyone in their debt collection efforts,” the RBI said. in a notification.

He also asked them not to send them inappropriate messages in any form, make threatening or anonymous calls in addition to not calling the borrower before 8 a.m. and after 7 p.m. for collection of delinquent loans. , or to make false and misleading statements.

RBI has issued guidelines from time to time under the Fair Practices Code (FPC) and has previously advised REs not to intimidate or harass their borrowers, calling them on the phone at odd hours in their debt collection efforts, among others.

The banking regulator said it took into account some recent developments, including the growing incidence of unacceptable practices followed by RAs (collection agents) to issue these additional instructions to REs.

These additions broadened the scope of the guidelines while limiting the hours for borrowers to call on delinquent loan collections.

RBI has stated that these instructions will be applicable to all commercial banks (including regional rural banks), cooperative banks, non-bank financial companies (NBFCs), asset reconstruction companies (ARCs) and all financial institutions Indian.

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