RBI Recovery Agent & Collections Conduct: A Working Checklist
What the Fair Practices Code requires, and what's new with mandatory agent certification.
Recovery conduct in India sits across several layers: the RBI's Fair Practices Code, the 2022 outsourcing circular on recovery agent responsibilities, provisions inside the 2025 Digital Lending Directions for app-based collections, and, most recently, a February 2026 direction introducing mandatory agent certification. Lenders are legally responsible for their agents' conduct regardless of employment status, salaried staff or third-party contractor. This is a working reference, not legal advice.
What's required today
| Requirement | What it covers |
|---|---|
| Calling hours | Contact for recovery of overdue loans is permitted only between 8:00 a.m. and 7:00 p.m.; anything outside that window is a Fair Practices Code violation |
| No third-party disclosure | Agents cannot discuss a borrower's default with family, employers, neighbors, or referees to apply pressure |
| No coercion or threats | Abusive language, threats of arrest or criminal prosecution for civil debt, and public humiliation are all prohibited outright |
| Identity disclosure | Every agent must state their name, the lender they represent, and the outstanding amount, and must carry a signed authorization letter |
| Lender liability for agents | Under the 2022 outsourcing circular, the regulated entity is responsible for agent misconduct; it cannot point to a third-party contractor as a defense |
| No device/contact-list access | Digital lending apps are barred from accessing a borrower's contact list, gallery, or personal media for collections purposes |
| Grievance redressal | A nodal officer's contact details must be published; if unresolved at the lender, the borrower can escalate to the RBI Ombudsman |
What's new: mandatory certification
RBI's February 2026 direction, effective July 1, 2026 and applying to banks, NBFCs, cooperative banks, and small finance banks, requires every recovery agent to complete a certified training program through the Indian Institute of Banking and Finance before working the role. Lenders have a one-year window to get existing agents certified. This is the most significant tightening of recovery conduct rules in several years, covering ethical conduct, SARFAESI procedure, communication standards, and grievance handling.
Regulators are enforcing this, not just publishing it
RBI has fined lenders directly for recovery agent violations, including a ₹2.5 crore penalty against Bajaj Finance for harassment-related breaches. The RBI Ombudsman can separately award compensation up to ₹1 lakh to an individual borrower for harassment or mental anguish, on top of any institutional penalty.
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