Stories
Know Your Rights Before Loan Recovery Calls Begin
- •RBI guidelines prohibit lenders and recovery agents from using harsh recovery practices, threats, abusive language, or calling outside the hours of 9 am and 6 pm.
- •Lenders remain fully responsible for the conduct of their recovery agents and must provide proper grievance redressal mechanisms.
- •Banks cannot seize or sell secured property simply due to non-payment of EMI without following legally permissible methods like the SARFAESI Act.
- •Borrowers must receive proper notice before a loan is recalled or security is enforced, giving them an opportunity to respond.
- •In case of financial hardship, borrowers should communicate early with lenders to discuss restructuring options or approach the RBI's Ombudsman Scheme for unresolved grievances.
Key Questions Answered
RBI rules prohibit recovery agents from using threatening language, engaging in abusive behavior, threatening violence, or publicly shaming borrowers. Agents are also barred from contacting borrowers before 9 am or after 6 pm, or harassing relatives and colleagues. Lenders remain entirely responsible for the conduct of their recovery agents.
No, possession and sale of property cannot occur simply due to a missed EMI. For secured loans, lenders must follow legally permissible methods and enforce security interests through specific legislations like the SARFAESI Act.
If a lender's recovery behavior is abusive or a complaint remains unresolved, borrowers can utilize the RBI's Integrated Ombudsman Scheme, 2026 for free-of-cost grievance redressal against specified regulated entities. Typically, complaints must first be raised directly with the lender.
