Loan recovery agent rules: what agents can and cannot do under RBI rules

Missing an EMI does not take away your rights. A bank or NBFC can ask you to repay, and it can hire a recovery agent to follow up. But the RBI sets firm limits on how that agent behaves, and the lender is answerable for every call its agent makes.

An illustration. Say you took a personal loan and have missed two EMIs of 12,000 rupees each. The lender may call, send reminders, and pass your case to an agency. What it cannot do is let an agent ring you at 10 pm, abuse you, or call your office to shame you.

The rules in force today

RBI’s circular of 12 August 2022 applies to banks, NBFCs (including housing finance companies), and other regulated lenders. It says lenders and their agents must not use intimidation or harassment of any kind, and spells out what that means:

• no verbal or physical intimidation or harassment
• no calls before 8 am or after 7 pm to recover an overdue loan, and no persistent calling
• no public humiliation, and no intruding on the privacy of your family, referees or friends
• no inappropriate messages on your phone or social media
• no threatening or anonymous calls, and no false or misleading claims

Older RBI guidelines from April 2008 add the paperwork. The bank must tell you which agency it has handed your case to. The agent must carry an identity card, the bank’s authorisation letter, and a copy of that notice, with the agency’s phone number on it. The bank must have a way to handle recovery complaints and tell you about it.

Stricter rules from 1 January 2027

In August 2026, RBI issued new, detailed recovery rules for commercial banks and for NBFCs, both in force from 1 January 2027. The main changes:

• Fixed hours. Agents may contact or visit you only between 8 am and 7 pm, unless you ask for another time.
• Notice before a visit. The lender must tell you the agency’s details at least one day before the first visit.
• Your place, your choice. Agents should ordinarily meet you where you choose, and avoid times such as a bereavement, a medical emergency or a wedding.
• Clear bans. Abusive or threatening language, threatening or anonymous calls, false claims, excessive calls, public humiliation, and posting your details or recordings on social media are all named as harsh practices.
• Trained agents. Agents must hold a certificate from the Indian Institute of Banking and Finance.
• Records. Lenders must record recovery calls and keep the records for six months.

Did you know? The 2027 rules also make every recovery message name the lender’s grievance redressal officer, with an email address, phone number and postal address. So if an agent’s message leaves out who to complain to, that itself is a breach worth reporting.

If an agent harasses you

Stay calm, and keep proof: call logs, recordings, messages, and the names and numbers used.

1. Complain to the lender. Write to its grievance redressal officer, whose details should be on its website and in your loan papers. The lender is responsible for its agent.
2. Go to the RBI Ombudsman. Under the Reserve Bank Integrated Ombudsman Scheme, 2026, you can complain if the lender does not reply within 30 days or you are unhappy with the reply. File within 90 days at cms.rbi.org.in, or by email to [email protected]. It’s free. The RBI contact centre on 14448 can guide you, though you cannot file a complaint by phone.
3. Call the police for threats. A threat of violence is a crime, not a recovery practice. Online threats can also be reported on the cybercrime helpline, 1930, as our guide to filing a cyber crime complaint explains.

Talking to the lender about a revised repayment plan often helps more than avoiding calls. Missed payments still hurt your credit score, so check your credit report once things settle.

Illegal loan apps are a different problem

These rules bind lenders the RBI regulates. An app that lends without any regulated lender behind it, then threatens to message your contacts, is not following RBI rules at all. That needs a police and cyber crime complaint, as explained in our guide to illegal loan apps.

The takeaway. You owe the money, but you do not owe anyone your dignity. A genuine agent calls between 8 am and 7 pm, carries ID and the lender’s letter, and never threatens you. If those lines are crossed, complain to the lender, then to the RBI Ombudsman, and to the police if there are threats.

More to read: personal loan basics, illegal loan apps, what to do about an income tax notice, which ITR form to file, and registering a will.