In a significant move to protect borrowers from predatory debt collection, the Reserve Bank of India (RBI) issued draft guidelines on February 12, 2026, that strictly limit when and how recovery agents can contact individuals. The most notable change is the implementation of a rigid 8:00 AM to 7:00 PM window for all recovery-related calls and visits.
These rules, titled the Reserve Bank of India (Commercial Banks – Responsible Business Conduct) Second Amendment Directions, 2026, are set to take effect on July 1, 2026.
The New “Code of Conduct”
The RBI’s latest framework aims to harmonize rules across all regulated entities (REs), including commercial banks, small finance banks, and NBFCs.
| Feature | New Regulation (Effective July 1, 2026) |
| Calling Hours | 8:00 AM – 7:00 PM (Strictly enforced) |
| Contact Restrictions | Only the borrower or guarantor; no friends/relatives/colleagues. |
| Call Recording | Mandatory recording and documentation of all interactions. |
| Inappropriate Times | No calls during bereavement, weddings, or festivals. |
| Certification | Agents must be certified by the IIBF after mandatory training. |
Defining “Harsh Practices”
For the first time, the RBI has explicitly listed specific behaviors that will be legally classified as “harsh methods” and are strictly prohibited:
- Abusive Language: Use of minatory, threatening, or foul language.
- Social Shaming: Sending “inappropriate” messages via mobile or social media.
- Anonymity: Making anonymous or intimidating calls from untraceable numbers.
- Public Humiliation: Any act intended to humiliate the borrower publicly or intrude upon their privacy.
- Misleading Claims: Providing false information about the size of the debt or legal consequences.
Accountability: The Bank is Responsible
The RBI has made it clear that banks can no longer “outsource” their responsibility.
- Board-Approved Policy: Lenders must have a formal, board-approved policy for engaging agents.
- Grievance Redressal: Lenders must establish a dedicated system to handle complaints related to recovery.
- Complaint Cooling-Off: If a borrower lodges a formal grievance, the bank cannot forward the case to a recovery agent until the complaint is fully resolved.
Why Now?
The move follows the February 2026 Monetary Policy statement by Governor Shaktikanta Das, responding to a surge in borrower complaints regarding digital lending apps and aggressive offline recovery tactics.
“Borrowers must be treated with dignity and decorum. Any departure from these norms will attract penal action against the regulated entity.” — RBI Draft Circular.
