Bar recovery agents from calling borrowers before 8 am, after 7 pm, proposes RBI

The draught further stated that the REs should have a management structure in place to oversee and regulate their outsourcing operations. These guidelines prohibit financial institutions and their recovery agents from contacting borrowers before 8 a.m. or after 7 p.m. The ‘Draught Master Direction on Managing Risks and Code of Conduct in Outsourcing of Financial Services’ stated that Regulated Entities, such as banks and NBFCs, should not outsource core management functions, such as policy formulation and decision-making functions like determining compliance with KYC norms and approving loan approval. “The REs and their Recovery Agents shall not resort to intimidation or harassment of any kind, either verbal or physical, against any person in their debt collection efforts, including acts intended to humiliate publicly or intrude upon the privacy of the debtors’/their guarantors’ family members…,” the draft said. “Further, the REs and their Recovery Agents are barred from calling the borrower/guarantor before 8:00 a.m. and after 7:00 p.m. for recovery of overdue loans,” the RBI has proposed.