RBI Tightens Loan Recovery Rules to Protect Borrowers

The Reserve Bank of India (RBI) has introduced new rules to curb harassment by loan recovery agents, with the framework taking effect from January 1, 2027.

Recovery calls and visits will generally be permitted only between 8 AM and 7 PM, while abusive language, threats, public humiliation and sharing borrowers’ personal information online are prohibited. Physical visits will require at least one day’s prior notice, with agents required to carry valid identification and authorisation.

The RBI has also introduced safeguards for remote locking of financed devices. Restrictions cannot begin immediately after an EMI default and must follow prescribed overdue periods, while emergency and essential communication services must remain available.

Lenders must also restore full device functionality promptly after dues are cleared and could face compensation for delays.