The draft directions prescribe detailed standards for recovery practices, borrower protection, grievance redressal, and engagement of recovery agencies. Regulated entities must implement due diligence, training, monitoring, and codes of conduct for recovery agents while prohibiting abusive, coercive, or misleading recovery methods. It also regulates technology-based recovery mechanisms that restrict mobile device functionalities, permitting such actions only under strict safeguards, notice requirements, and compensation provisions for wrongful restrictions. Borrower privacy protections, mandatory call recording, restrictions on communication timing, and transparency obligations have also been introduced. The feedback/ comments from stakeholders are invited.
(Link: RBI Press Release Dated 20/05/2026, Draft CBs, SFBs, LABs, RRBs, UCBs, RCBs, AIFIs, NBFCs and HFCs)