RBI proposes stricter debt collection rules, including limits on call hours and bans on harassment

The Reserve Bank of India (RBI) has proposed new guidelines for debt collection practices in India, with the aim of protecting borrowers from harassment and intimidation. The guidelines, which are currently in draft form, prohibit financial institutions and their recovery agents from contacting borrowers before 8 a.m. or after 7 p.m. They also ban recovery agents from using threatening or anonymous language, continuously contacting borrowers, or making false or misleading statements.

In addition, the guidelines require financial institutions to implement a code of conduct for recovery agents, direct sales agents, and direct marketing agents. The code of conduct must be approved by the institution”s board and must cover topics such as proper solicitation of customers, call hours, customer privacy, and accurate disclosure of product terms and conditions.

The RBI has also proposed guidelines for outsourcing of financial services offshore. These guidelines are designed to ensure that financial institutions maintain control over their outsourced operations and that the interests of customers are protected.

The RBI has invited stakeholders to submit comments on the draft guidelines by November 28, 2023.