On Friday, the recovery agents were told not to resort to intimidation of borrowers and calling them before 8 am and after 7 pm.
While issuing additional instructions to regulated entities, including banks, and ARCs, Reserve Bank RBI has observed that recovery agents are deviating from its instructions with regard to the recovery of loans.
It is advised that the REs regulated entities must ensure that they do not resort to intimidation or harassment of any kind, verbal or physical, against anyone in their debt collection efforts.
It asked them not to send inappropriate messages in any form, make threatening or anonymous calls, and not calling the borrower before 8 am and after 7 pm for the recovery of overdue loans, or make false and misleading representations.
As part of the Fair Practices Code FPC, the guidelines have been issued from time to time and have already warned REs not to resort to intimidation or harassment of their borrowers, calling them on the phone at odd hours in their debt collection efforts.
The banking regulator took into account some recent developments including growing incidences of unacceptable practices followed by RAs recovery agents to issue additional instructions to REs.
The hours for calling borrowers on the phone have been shortened because of these additions and the hours for recovery of overdue loans have been extended.
RBI said these instructions will be applicable to all rural banks, Cooperative Banks, Non-Banking Financial Companies NBFCs Asset Reconstruction Companies ARCs, and all Indian financial institutions.