In a major relief for bank loan defaulters, the Reserve Bank of India (RBI), taking into account certain recent developments including growing incidences of ‘unacceptable practices’ followed by recovery agents (RAs), has issued additional instructions to regulated entities (REs) by extending the scope of the guidelines and limiting the hours for calling borrowers on phone for recovery of overdue loans.
These instructions will be applicable to all commercial banks, including regional rural banks, co-operative banks, non-banking financial companies (NBFCs), asset reconstruction companies (ARCs) and All India financial institutions, the RBI said in a circular.
“The RBI has from time to time advised REs that the ultimate responsibility for their outsourced activities vests with them and they are, therefore, responsible for the actions of their service providers including recovery agents [agents],” the regulator said.
