RBI Unveils New Loan Recovery Rules from July: Protecting Borrowers, Curbing Harassment

• RBI introduces new rules for loan recovery, effective July, to protect borrowers and enhance transparency.
• Draft titled "RBI (Commercial Banks - Responsible Business Conduct) Second Amendment Directions, 2026" aims to reduce harassment.
• Banks must have board-approved policies for recovery agents, including background checks, training, and IIBF certification.
• Transparency mandates banks to publish authorized agent lists and inform customers via SMS/email if a new agent is assigned.
• Prohibits recovery agents from contacting borrowers during weddings, deaths, festivals, and bans rude behavior or intimidation.