Harassment by Loan Recovery Agents: What Borrowers Can Legally Do

This article is general information only, not legal advice, and not solicitation of work. It should not be relied upon as a substitute for advice on your specific facts.

What RBI Guidelines Actually Require

The Reserve Bank of India’s fair practices code, applicable to banks and NBFCs and, by extension, to the recovery agents they engage, requires that recovery be conducted with courtesy and without harassment. Agents are expected to identify themselves, contact borrowers only at reasonable hours, and avoid intimidation, public humiliation, or contact with third parties such as employers, neighbours, or family beyond what is necessary and permitted.

What Crosses the Line

Repeated calls at odd hours, threatening language, visits to a borrower’s workplace intended to embarrass them, contacting relatives or colleagues to pressure the borrower, and any form of physical intimidation are not legitimate recovery practices, regardless of whether the underlying debt is genuine. A valid debt does not license unlawful recovery conduct.

Remedies Available to Borrowers

A borrower facing this kind of conduct can file a written complaint with the lender’s grievance redressal officer, escalate to the RBI Banking Ombudsman if unresolved, and, where the conduct amounts to criminal intimidation, harassment, or defamation, file a police complaint. Civil remedies for harassment, including damages, are also available in appropriate cases.

Documenting Harassment

Call logs, recordings where lawfully made, messages, and a written record of dates and the substance of each interaction substantially strengthen a complaint. Borrowers should also continue engaging constructively on the underlying debt where genuinely owed, since disputing the recovery method is separate from disputing the debt itself.

This note is prepared by our Banking & Insolvency team. If you are dealing with a related situation, get in touch with us.