In a serious aid for financial institution mortgage defaulters, the Reserve Bank of India (RBI), considering sure latest developments together with rising incidences of ‘unacceptable practices’ adopted by restoration brokers (RAs), has issued further directions to regulated entities (REs) by extending the scope of the rules and limiting the hours for calling debtors on telephone for restoration of overdue loans.
These directions might be relevant to all business banks, together with regional rural banks, co-operative banks, non-banking monetary corporations (NBFCs), asset reconstruction corporations (ARCs) and All India monetary establishments, the RBI stated in a round.
“The RBI has from time to time advised REs that the ultimate responsibility for their outsourced activities vests with them and they are, therefore, responsible for the actions of their service providers including recovery agents [agents],” the regulator stated.
“It has been observed that the agents employed by REs have been deviating from the extant instructions governing the outsourcing of financial services. In view of concerns arising from the activities of these agents, it is advised that the REs shall strictly ensure that they or their agents do not resort to intimidation or harassment of any kind, either verbal or physical, against any person in their debt collection efforts,” the RBI stated.
“[This is] including acts intended to humiliate publicly or intrude upon the privacy of the debtors’ family members, referees and friends, sending inappropriate messages either on mobile or through social media, making threatening and/ or anonymous calls, persistently calling the borrower and/ or calling the borrower before 8:00 a.m. and after 7:00 p.m. for recovery of overdue loans, making false and misleading representations,” the RBI added. It stated any violation on this regard by REs could be seen severely.
Source: www.thehindu.com
