The Reserve Bank of India on Friday tightened rules for debt recovery agents after complaints of unfair recovery practices and strong arm tactics, and asked banks to ensure that agents do not harass borrowers during collections.
“In view of the concerns arising out of the activities of the agents, it is advised that the REs strictly ensure that they or their agents do not resort to threats or harassment against any person in their debt recovery efforts, either verbal or physical. form,” it said in a press note.
The central bank said that banks, non-banking financial companies, co-operative banks, housing finance and asset reconstruction companies should ensure that recovery agents avoid humiliating borrowers in public or inappropriate messages on mobile or through social media. send. They should also refrain from calling borrowers before 8:00 AM and after 7:00 PM for recovery of overdue loans and making false and misleading representations.
RBI has come down hard on illegal activities by digital lenders after the Chinese loan app scam. On Wednesday, the regulator came out with a regulatory framework for digital lenders.
RBI said that regulated entities should ensure that loan servicing and repayment is executed directly in their bank accounts without any third party pass-through or pool account.
The disbursements need to be made in the bank account of the borrower, it added
RBI said that any fee or charges payable to the lending service providers should be paid directly by the regulated entity and not by the borrower. Regulated entities will also have to offer a cool-off period during which borrowers can exit the digital loan without penalty by paying the principal amount plus a proportionate cost.
In addition, regulated entities should also ensure that all loan service providers appointed by them have a nodal grievance redressal officer to deal with complaints regarding digital loans.
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