RBI tighten norms for loan recovery agents

MUMBAI, Aug. 12 (IANS) The Reserve Bank of India (RBI) said on Friday that companies should ensure their debt collectors do not interfere with anyone when collecting debt. The recovery call time is set between 8am and 7pm.

RBI tighten norms for loan recovery agents

“It has been observed that the agency employed by RE deviated from existing instructions for outsourcing financial services,” RBI said in a statement.

“Given the concerns that arise from the activities of these agents, REs are recommended to strictly ensure that they or their agents do not use intimidation or harassment of any kind, verbal or physical, against anyone in their solicitation efforts, including actions, aimed at publicly humiliating or violating the privacy of family members,

judges and friends of the debtor, sending inappropriate messages on a mobile device or via social media, making threatening and/or anonymous calls, making constant and/or prior calls from the borrower at 8am onwards 7pm to collect loan arrears, provide false and misleading information, etc,” he added.

“Existing guidelines on acceptable times for phone calls to borrowers for recovery purposes are now being clarified with respect to HFCs and REs making microfinance loans.

Taking into account some of the recent developments, including the increasing examples of unacceptable practices followed by ETs, the Reserve Bank of India has issued some additional guidance for ETs by expanding the scope of the guidelines,” the circular reads.

The attention of the Governor of RBI previously focused on the collection methods used by several companies to collect debts.

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