RBI have imposed strict norms on harassment for debts by recovery agents

A number of recent illegal harassment for debts practices have come to the news and are spreading like wildfire. Thus, many people are facing miserable lives by going into severe depression or by committing suicide. This matter has been deemed as a serious matter by the Reserve Bank of India (RBI). This is because people who are in debt are suffering major harm to their lifestyle due to harassment for debts by recovery agents.

Following a rise in illegal harassment by the recovery agents for collecting debts from the people, RBI imposed tighter regulations regarding the illegal harassment done by the recovery agents. They have taken into consideration and implemented strict guidelines to take action against them.

The Reserve Bank of India (RBI) in their guidelines conveyed that banks and NBFCs need to ensure that their recovery agents do not conduct any kind of harassment to any person while collecting debts.

Timing for call for recovery has been set between 8:00 a.m. to 7 p.m.

There has been evidence indicating that the recovery agents employed by banks and NBFCs are deviating from instructions given by the Reserve Bank of India.

In view of the concern raised by the activities of these recovery agents, it is advised to the banks that they strictly ensure that their third-party agents do not resort to any kind of harassment, either verbal or physical, against anyone at the time of collecting debts. It also includes the act of humiliating the debtor publicly or invading the privacy of the debtor’s contacts, like family members and friends. These messages may be offensive or anonymous threats. This is done by persistently calling the borrower beyond the official time and harassing him or her for the debt collection.

What are the laws available for debt collection agencies in India?

The law governing the working pattern of debt collection agencies in India is under the recovery of debts & bankruptcy act 1993. According to these acts a recovery agent needs to provide the debtors with a written notice of the debt they hold. The notice must include the amount of debt, the name and address of the creditors and a statement that the debtor has a right to dispute the debt.

These acts also take into consideration when a creditor can’t make use of abusive, unfair, or deceptive practices while collecting debts. It also gives consumers the right to lodge a complaint against creditors if they do harassment for debts.

How do these laws protect debtors from harassment for debts?

The law governing third-party agents in India protects consumers from harassment by prohibiting creditors from utilizing unfair or unconscionable means to collect debts. This includes harassment, threats, intimidation, and undue pressure.

What can you do if harassment for debts is done by the recovery agent?

If you are being harassed by your debt collection agent, there are several things you can do:

First you can file a complaint with the bank. If you are still getting harassed by the debt collection agent, you can file a complaint with the banking ombudsman.

The second option you have is to file a lawsuit against a debt collection agent. If you win against them, you are entitled to receive compensation for the damages.

 If you are struggling with repayment of debts, the last thing that will hit the course is to stop paying them. This can lead to recovery agent harassment and severely affect your credit score. If you feel you are not in a position to repay your EMI’s, a debt solution is always available. A debt solution program with us will give you an affordable Debt Management plan so you can repay your debts and live stress-free. Contact SingleDebt on +91 961 910 3594 or fill out the form either on the home page or contact page.

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