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Mumbai, August 12
The Reserve Bank of India (RBI), on Friday, asked regulated entities (REs) to ensure that recovery agents employed by them don’t call borrowers before 8:00 am and after 7:00 pm for recovery of overdue loans.
The aforementioned directive is contained in the central bank’s circular on ‘Outsourcing of Financial Services - Responsibilities of Regulated Entities Employing Recovery Agents’, addressed to REs (commercial banks, All India Financial Institutions, non-banking finance companies (including housing finance companies), co-operative banks and asset reconstruction companies.
The RBI directed that REs and their agents should strictly ensure that they 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, making false and misleading representations, among others.
The aforementioned advisory comes as RBI has observed that the agents employed by REs have been deviating from the extant instructions governing the outsourcing of financial services.
The RBI emphasised that the ultimate responsibility for activities outsourced by REs vests with them and, they are, therefore, responsible for the actions of their service providers, including recovery agents.
The central bank warned REs that any violation of its instructions in this regard by REs will be viewed seriously.
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