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RBI ReportPublished 9 Aug 2026Read time 1 minEffective 1 Jan 2027

RBI Sets Stricter Rules for NBFC Loan Recovery Agents

RBI issued new conduct rules for recovery agents working with NBFC lenders.

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For information only. Not financial advice. Verify with official sources before taking any action.

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What happened

The Reserve Bank of India (RBI) has issued new rules for Non-Banking Financial Companies (NBFCs — private lenders like Bajaj Finance, Muthoot, etc.) on how they can recover loans from borrowers who have missed payments. These rules define exactly who a recovery agent is and set conduct standards for how they must behave. The new directions take effect from January 1, 2027.

Why it matters

Many borrowers have complained about harassment by loan recovery agents working for NBFCs. RBI reviewed existing rules and decided to issue one clear, comprehensive set of instructions to protect borrowers. This is part of RBI's broader effort to make lending and recovery practices fair and transparent across all NBFCs.

What to check

  • →Check if your existing loan is from an NBFC — look at your loan agreement or app to see the lender's name and type.
  • →Find out what rights you have if a recovery agent contacts you — RBI rules require agents to behave respectfully and at reasonable hours.
  • →Ask your NBFC lender for a written notice before any recovery agent visits your home or workplace.
  • →Look at the RBI's Fair Practices Code on the RBI website to understand what recovery agents are and are not allowed to do.
  • →Consider keeping a record of any communication from recovery agents, including time, date, and what was said.

This is general information, not financial advice. Check your own position with your lender or an adviser.

What this means for you

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