How to Stop Loan Recovery Harassment in India (2024 Legal Guide)

Are you receiving threatening calls from recovery agents? Do they call your relatives, visit your workplace, or use abusive language? If yes, you need to know that this is illegal according to the Reserve Bank of India (RBI) guidelines.

1. Understanding Your Rights as a Borrower

The RBI has laid down strict Fair Practice Codes for lenders. Following acts by recovery agents are strictly prohibited:

• Calling before 8:00 AM or after 7:00 PM.
• Using abusive or threatening language.
• Contacting friends, family, or employers to shame the borrower.
• Visiting your home without prior notice.
• Misrepresenting themselves as police or court officials.

2. Steps to Stop Harassment Immediately

Step 1: Record Everything

Start recording all calls. Save screenshots of WhatsApp threats or SMS. This evidence is crucial for filing a legal complaint.

Step 2: Send a Formal Legal Reply

Do not engage in verbal fights. Instead, send a formal email to the bank's grievance officer stating that you are facing financial hardship and requesting a restructuring. Mention the harassment details.

Step 3: Hire a Debt Resolution Lawyer

If the harassment continues, you need legal protection. Services like Loan Free Financial Services can authorize a lawyer to represent you. Once a lawyer is appointed, agents are legally required to communicate only with your legal counsel, stopping direct harassment to you.

3. RBI's Latest Guidelines (2024 Update)

Recent RBI circulars have further tightened norms for digital lending apps and recovery agencies. Banks are now vicariously liable for the actions of their recovery agents. If an agent misbehaves, the bank can potentialy lose its license or face heavy penalties.

Conclusion

Financial hardship is tough, but it's not a crime. You have the right to be treated with dignity. Do not let fear dictate your life. Take legal action and start your journey towards a settlement.