by The role of third-party recovery agents employed by banks and Non-Banking Financial Companies (NBFCs) is crucial in managing overdue loans and recovering dues. However, the Reserve Bank of India (RBI) has laid down specific guidelines to ensure that the recovery process is conducted in a fair, respectful, and non-intrusive manner. One important aspect of these guidelines pertains to the timing of calls made by recovery agents to borrowers.
RBI’s Fair Practices Code: Protecting Borrowers' Rights
The RBI’s guidelines, encapsulated in the Fair Practices Code, are designed to safeguard borrowers from any form of harassment or undue stress during the recovery process. These guidelines emphasize transparency, fairness, and respect for the borrower’s privacy. Here’s a closer look at what these guidelines entail:
Timing of Calls
According to the RBI, recovery agents must adhere to specific time frames when contacting borrowers. They are generally allowed to call between:
- 7:00 AM to 7:00 PM on weekdays and Saturdays.
Calls outside these hours are considered inappropriate unless the borrower has explicitly consented to being contacted at other times.
Contact on Sundays and Public Holidays
The RBI guidelines strongly discourage recovery agents from contacting borrowers on Sundays and public holidays. This policy stems from the need to respect the borrower’s personal time and mental peace. The only exception to this rule is if the borrower has given explicit prior consent to be contacted on these days.
Why the Restriction on Sundays?
Respecting Personal Time: Sundays and public holidays are typically reserved for personal time and rest. Interrupting this time can cause undue stress and anxiety for borrowers.
Preventing Harassment: These guidelines are part of a broader effort to prevent any form of harassment. By restricting the days and times when borrowers can be contacted, the RBI aims to ensure that recovery agents do not exert undue pressure on borrowers.
Ethical Recovery Practices: The RBI’s focus is on maintaining ethical standards in the recovery process. Respecting the borrower’s time is a fundamental aspect of this approach.
What Should Borrowers Do?
Know Your Rights: Borrowers should be aware of their rights under the RBI guidelines. Understanding that they cannot be contacted at odd hours or on Sundays without their consent is crucial.
Report Violations: If borrowers experience any form of harassment or receive calls outside the permissible hours, they should report these incidents to the bank or NBFC. Borrowers can also escalate the matter to the RBI if necessary.
Provide Clear Communication: If a borrower prefers certain times for communication, they should clearly communicate this to their lender. Providing consent for contact on specific days or times should be done in writing to avoid any misunderstandings.
Responsibilities of Banks and NBFCs
Banks and NBFCs are responsible for ensuring that their recovery agents follow these guidelines. They must:
Train Agents: Proper training should be provided to recovery agents regarding the RBI’s guidelines and ethical practices in debt recovery.
Monitor Compliance: Regular monitoring and audits should be conducted to ensure compliance with the guidelines.
Address Complaints: Promptly address any complaints from borrowers regarding harassment or inappropriate contact times.
Conclusion
The RBI’s guidelines on the timing of calls by third-party recovery agents are a critical aspect of protecting borrower rights and ensuring fair recovery practices. While the recovery of dues is essential for the financial health of banks and NBFCs, it must be balanced with respect for the borrower’s privacy and mental well-being. Borrowers should be aware of their rights and feel empowered to report any violations, while lenders must uphold these guidelines through diligent training and monitoring of their recovery agents.
Understanding and adhering to these guidelines helps maintain a fair and respectful relationship between lenders and borrowers, fostering a more ethical financial ecosystem.
