The Reserve Bank of India has issued revised draft amendment directions for a second round of public consultation on how regulated entities recover loans and engage recovery agents. The drafts amend responsible business conduct requirements for commercial banks, small finance banks, local area banks, regional rural banks, urban and rural co-operative banks, All India financial institutions, non-banking financial companies and housing finance companies, after substantial feedback led to changes in many key provisions of the February 12, 2026 draft. The revisions also incorporate accepted stakeholder feedback on whether lenders should be enabled to use technology-based mechanisms that restrict or disable some functions of a financed mobile device, such as a phone or tablet, when a borrower defaults. Comments on the revised drafts are due by May 31, 2026.
Reserve Bank of India2026-05-20
Reserve Bank of India issues revised draft directions on loan recovery and recovery agents for second consultation
The Reserve Bank of India has issued revised draft amendment directions for a second public consultation on loan recovery practices and the use of recovery agents by banks and non-bank lenders. The drafts update responsible business conduct requirements for a wide range of regulated entities and reflect changes to key provisions of the February 12, 2026 draft, including on the use of technology-based mechanisms to restrict functions of financed mobile devices in default.