The RBI has issued new rules for loan recovery. From January 1, 2027, recovery agents will be prohibited from harassing borrowers. Banks will be required to pay a compensation of ₹250 if there is a delay in unlocking a mobile phone after repaying a mobile loan.
RBI's big relief to borrowers
If you have taken a loan from a bank or a finance company, this news is extremely important for you. The Reserve Bank of India has made significant changes to the rules related to loan recovery. The new regulations aim to ensure that customers are not subjected to abuse or pressure in the name of loan recovery. These rules will come into effect on January 1, 2027.
According to the new rules, recovery agents will no longer be able to threaten or harass customers with repeated phone calls or messages. Furthermore, recovery calls will not be permitted before 8 a.m. and after 7 p.m. Furthermore, agents will also be prohibited from harassing customers' family or friends.
Changed rules for social media?
RBI has clearly stated that recovery agents cannot defame any customer by sharing their photos, videos, or personal information on social media. Customer privacy must be fully respected.
What are the rules for mobile loans?
If you purchased a mobile phone on EMI, the bank or finance company can only lock the mobile phone for which the loan was taken. Your phone cannot be locked to recover any other loan. Furthermore, even after the phone is locked, essential services like incoming calls and messages cannot be disabled.
Who will receive compensation?
Under the new rules, once the customer pays the outstanding amount, the bank must restore all phone services within one hour. If there is a delay, the bank or finance company will have to compensate the customer at the rate of ₹250 per hour.
What is required for a recovery agent?
Now, every recovery agent will be required to have an ID card and an authorization letter issued by the bank. The bank will also be required to inform the customer in advance when the recovery agent will visit. If the agency changes, the customer will also need to be informed of this.
Will filing a complaint be easier?
If a customer has a problem with the behavior of a recovery agent, the bank will have to provide a facility to process the complaint. If a recovery is made incorrectly, the customer will also be able to receive compensation. These new rules will most benefit those who, after taking out a loan, were troubled by the misbehavior of recovery agents or repeated calls. Customers taking out mobile loans will also find relief, as they will receive compensation if there is a delay in unlocking the phone after payment.
