{"id":196,"date":"2026-05-20T12:40:43","date_gmt":"2026-05-20T12:40:43","guid":{"rendered":"https:\/\/aashisharoramaths.com\/blog\/?post_type=notifications&p=196"},"modified":"2026-06-04T11:03:54","modified_gmt":"2026-06-04T11:03:54","slug":"rbi-issues-new-draft-rules-on-loan-recovery-agents-what-every-banking-aspirant-must-know","status":"publish","type":"notifications","link":"https:\/\/aashisharoramaths.com\/notifications\/rbi-issues-new-draft-rules-on-loan-recovery-agents-what-every-banking-aspirant-must-know\/","title":{"rendered":"RBI Issues New Draft Rules on Loan Recovery Agents \u2014 What Every Banking Aspirant Must Know"},"content":{"rendered":"

The Reserve Bank of India (RBI) made a major move on <\/span>20 May 2026<\/b> \u2014 it released revised draft amendment directions on the <\/span>“Conduct of Regulated Entities in Recovery of Loans and Engagement of Recovery Agents.”<\/b><\/p>\n

If you are preparing for <\/span>SBI PO, IBPS PO, RBI Grade B<\/b>, or any banking exam, this is a <\/span>must-read topic<\/b> for your General Awareness section. Here’s everything explained in simple language.<\/span><\/p>\n

What Is This Draft About?<\/b><\/h2>\n

Banks and NBFCs often hire recovery agents to collect loan repayments from borrowers. In recent years, there have been widespread complaints of <\/span>harassment, threatening calls, and public shaming<\/b> of defaulters.<\/span><\/p>\n

RBI first released a draft on this in <\/span>February 2026<\/b>, received heavy feedback from the public and stakeholders, and has now released a <\/span>revised and stronger version<\/b> on May 20, 2026.<\/span><\/p>\n

Last date to submit comments: 31 May 2026<\/b> Expected to come into effect: 1 October 2026<\/b><\/p>\n

 <\/p>\n

Key Rules Proposed by RBI<\/b><\/h3>\n\n\n\n\n\n\n\n\n\n\n\n
Rule<\/b><\/td>\nWhat It Means for You<\/b><\/td>\n<\/tr>\n
No calls before 8 AM or after 7 PM<\/b><\/td>\nRecovery agents cannot disturb borrowers at odd hours<\/span><\/td>\n<\/tr>\n
No phone blocking for loan defaults<\/b><\/td>\nBanks cannot disable your mobile phone for unpaid personal, home, or car loans<\/span><\/td>\n<\/tr>\n
Phone can only be blocked if phone itself was financed<\/b><\/td>\nException: If the loan was taken to buy the device (smartphone\/tablet)<\/span><\/td>\n<\/tr>\n
No harassment or intimidation<\/b><\/td>\nThreatening language, repeated calls, public shaming, contacting relatives \u2014 all strictly prohibited<\/span><\/td>\n<\/tr>\n
Mandatory training & certification<\/b><\/td>\nRecovery agents must be certified by IIBF (Indian Institute of Banking & Finance)<\/span><\/td>\n<\/tr>\n
Call records must be maintained<\/b><\/td>\nBanks must keep logs of all calls made to borrowers and guarantors<\/span><\/td>\n<\/tr>\n
Background verification compulsory<\/b><\/td>\nAll recovery staff must be verified before deployment<\/span><\/td>\n<\/tr>\n
Borrower data is protected<\/b><\/td>\nAgents cannot be given excessive personal information about the borrower<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

 <\/p>\n

Why Did RBI Make These Changes?<\/b><\/h2>\n