Now bullying by banks will not work for loan recovery, RBI has made this preparation

The Kalamkar News (New Delhi). When a common man takes a loan, it becomes a tension for that person, whereas the loan taken by the rich becomes a problem for the banks. 

If the common man is unable to repay the loan, he has been threatened by financial institutions. If you are also troubled by loan recovery agents, then there is relief news for you. 

Actually, a special proposal has now been made by the Reserve Bank of India (RBI), after which recovery agents will not be able to call you after 7 pm.

RBI on Thursday proposed to tighten the standards for recovery of outstanding loans. Under this, financial institutions and their recovery agents cannot call borrowers before 8 am and after 7 pm. 

According to news agency PTI, RBI's 'Draft Master Direction on Managing Risks and Code of Conduct in Outsourcing of Financial Services' states that regulated entities (RE) like banks and NBFCs. Key management functions should not be outsourced. These tasks also include policy formulation and determination of compliance with KYC norms and loan approval.

Banks should make code of conduct for recovery agents

RBI said that REs should ensure that their responsibilities towards customers are not diminished by outsourcing arrangements. 

According to the draft, banks and NBFCs should formulate a code of conduct for direct sales agents (DSA), direct marketing agents (DMA) and collection agents. 

Regulated entities should ensure that DSAs, DMAs and recovery agents are appropriately trained so that they discharge their responsibilities with sensitivity.

Recovery agents should be sensitive with lenders

The central bank said that REs and their recovery agents will not resort to any form of threat or harassment, whether verbal or physical, against any person to recover the loan. Along with this, recovery agents cannot publicly humiliate the borrowers nor interfere in their privacy.