The Reserve Bank of India has issued draft Responsible Business Conduct (Second Amendment) Directions, 2026 to regulate the conduct of loan recovery agents, effective from July 1, 2026. The guidelines prohibit harassment, abusive language, excessive or anonymous calls, inappropriate digital messages, and any form of intimidation or public humiliation of borrowers or guarantors. Banks are required to establish a dedicated grievance redressal mechanism and adopt board-approved policies covering due diligence, code of conduct, and performance standards for recovery agents. The move aims to strengthen financial consumer protection, promote ethical recovery practices, and balance borrower dignity with credit discipline in India’s expanding retail lending ecosystem.
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