RBI has reined in agents regarding loan recovery, calls cannot be made after 7 pm, know the rule

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RBI Rules for Loan Recovery: The Reserve Bank of India is bringing strict rules to prevent calls from agents coming at any time for loan recovery. As per RBI's proposed rule, if a customer defaults on loan installments, he cannot be called earlier than 8 am and after 7 pm for loan recovery.

Outsourcing does not reduce the liability of financial institutions

According to a report in the Economic Times, the RBI has said that even after outsourcing by a financial institution, its responsibilities are not fulfilled. It is also equally responsible towards the customers. Along with this, in this draft, RBI has talked about making rules for direct sales agents, direct marketing agents and recovery agents. This rule should be applicable to all three, public, private and NBFC.

The debtor cannot be threatened

To ensure the rights of consumers, RBI has directed financial institutions that recovery agents should not threaten or resort to coercion at the time of recovery. Apart from this, training should also be given on when and how to talk to the customer in a call or message during recovery. Apart from this, customers should not be insulted and their privacy should be taken care of.

RBI also asked financial institutions to avoid outsourcing critical functions

Along with this, RBI has also advised non-banking financial companies and banks to avoid outsourcing important policy management related functions like KYC regulations, loan approval etc. to other companies. RBI has said these things in its Draft Master Direction on Managing Risks and Code of Conduct in Outsourcing of Financial Services.

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