RBI On Loan Recovery: If you are not able to pay the loan EMI then there is no need to worry about recovery agents, RBI is going to bring these new rules.

Mumbai If you have taken a loan and are not able to pay the EMI, then there is no need to worry about recovery agents. Reserve Bank of India (RBI) is going to bring new rules related to loan recovery. RBI has released the draft of new rules. After taking suggestions from stakeholders, these rules are set to be implemented from October 1, 2026. The new RBI rules are meant to enhance the safety of borrowers, prevent malpractices by recovery agents and bring clarity in recovery matters. All these rules of RBI will be applicable to all commercial banks except Small Finance Bank, Payments Bank, Regional Rural Bank and local level banks.

The definition of loan recovery agency and agent has been clarified in the draft rules of RBI. The outsourced company or person hired for loan recovery will be considered as recovery agency. The one who directly contacts the borrower is called recovery agent. RBI’s draft rules state that if business correspondents are involved in the recovery, these rules will be applied to them. RBI has said that banks will have to make the right policy for loan recovery. The performance of loan recoverers and the method of action on complaints against them will have to be decided. RBI has written in the draft that if the recovery agents are wrong, then the borrower should be compensated for the loss.

If a recovery agent will visit the borrower’s place, he will have to inform the concerned at least a day in advance. Apart from this, information about changing or closing the loan recovery agency will also have to be given. Unless the borrower asks for a different time, loan recovery agents will be able to visit people only between 8 am to 7 pm. Also, recovery agents will not be able to call anyone repeatedly. Abusing, harassing, threatening or defaming those who do not pay loan EMIs on social media will not suffice. If someone has financed his phone, then if he does not pay the EMI, his service can be stopped with certain conditions, but emergency calls and public safety alerts cannot be stopped.

Reserve Bank of India issues revised draft of the Amendment Directions on ‘Debt Recovery Conduct of Regulated Institutions and Appointment of Recovery Agents’
RBI Issues Revised Draft Amendment Directions on ‘Conduct of Regulated Entities in Recovery of Loans and Engagement of Recovery Agents’…

— ReserveBankOfIndia (@RBI) May 20, 2026

For recovery, the borrower will be required to keep a recording of all calls made. If the borrower complains, the recovery will be stopped immediately. Banks will not be able to see the data stored in the mobile of any loan borrower. Apart from this, RBI has made it mandatory for recovery agents to obtain a certificate from the Indian Institute of Banking and Finance (IIBF) or its equivalent institute. Also, recovery agencies will have to check their agents first. Also the code of conduct will have to be followed. After the implementation of the new RBI rules, all commercial banks will have to provide the updated list of recovery agencies on their websites and apps.