RBI05 Aug 2026press-releasePrepared by Complied AI

Conduct of Regulated Entities in Recovery of Loans and Engagement of Recovery Agents

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RBI Issues Amendment Directions on ‘Conduct of Regulated Entities in Recovery of Loans and Engagement of Recovery Agents’

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The Reserve Bank of India has issued final Amendment Directions regarding the conduct of Regulated Entities (REs) in loan recovery and the engagement of recovery agents. These directions follow a public consultation process initiated in May 2026. The updated framework mandates fair treatment of borrowers, establishes codes of conduct for employees and recovery agents, and sets requirements for due diligence and training. Additionally, the instructions address the conduct of REs when utilizing technology-based mechanisms for recovering dues from financed mobile devices. These directions apply to various banking and financial institutions, including commercial banks, small finance banks, regional rural banks, cooperative banks, and non-banking financial companies, and will become effective on January 1, 2027.

Who is affected: Regulated entities including 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.
Required action: Regulated entities must adhere to the specified conduct standards regarding fair treatment of borrowers, employee and recovery agent behavior, due diligence, training, and the use of technology-based recovery mechanisms.
Key dates: Effective date of the Amendment Directions — 31 Dec 2026

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Source details

Source: Reserve Bank of India
Type: press-release
Published by source: 05 Aug 2026
Document number: 2026-2027/827
Issuing division: Department of Communication
Effective date: 31 Dec 2026
Coverage area: banking

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August 06, 2026

RBI Issues Amendment Directions on ‘Conduct of Regulated Entities in Recovery of Loans and Engagement of Recovery Agents’

The Reserve Bank had issued the revised draft Amendment Directions on 'Conduct of Regulated Entities in Recovery of Loans and Engagement of Recovery Agents' on May 20, 2026 for seeking feedback from stakeholders. Feedback received on the above revised draft Directions has been examined and the consequent modifications have been suitably incorporated in the final Amendment Directions. A statement on the feedback received is provided in the Annex.

Accordingly, the Reserve Bank has today issued the following Amendment Directions, which shall come into effect from January 1, 2027.

(i) Reserve Bank of India (Commercial Banks - Responsible Business Conduct) Fourth Amendment Directions, 2026 (ii) Reserve Bank of India (Small Finance Banks - Responsible Business Conduct) Fourth Amendment Directions, 2026 (iii) Reserve Bank of India (Local Area Banks - Responsible Business Conduct) Fourth Amendment Directions, 2026 (iv) Reserve Bank of India (Regional Rural Banks - Responsible Business Conduct) Fourth Amendment Directions, 2026 (v) Reserve Bank of India (Urban Co-operative Banks - Responsible Business Conduct) Fourth Amendment Directions, 2026 (vi) Reserve Bank of India (Rural Co-operative Banks - Responsible Business Conduct) Fourth Amendment Directions, 2026 (vii) Reserve Bank of India (All India Financial Institutions - Responsible Business Conduct) Third Amendment Directions, 2026 (viii) Reserve Bank of India (Non-Banking Financial Companies - Responsible Business Conduct) Third Amendment Directions, 2026 (ix) Reserve Bank of India (Housing Finance Companies) Third Amendment Directions, 2026

The Amendment Directions include comprehensive instructions to all regulated entities (REs) on conduct related matters in recovery of loans and engagement of recovery agents, which inter alia cover aspects such as fair treatment to borrowers during recovery process, conduct of lender’s employees and recovery agents, and due diligence, training, code of conduct for recovery agents, etc. and also conduct of REs while deploying a technology-based mechanism for recovery of loan dues in financed mobile devices of a borrower.

(Brij Raj) Press Release: 2026-2027/827 Chief General Manager

ᮧेस ᮧकाशनी PRESS RELEASE

भारतीय ᳯरज़वर् बᱹक

RESERVE BANK OF INDIA

वेबसाइट : www.rbi.org.in/hindi संचार िवभाग, कᱶᮤीय कायार्लय, शहीद भगत ᳲसंह मागर्, फोटर्, मुंबई - 400 001 Website : www.rbi.org.in Department of Communication, Central Office, Shahid Bhagat Singh Marg, Fort, ई-मेल/email : helpdoc@rbi.org.in Mumbai - 400 001 फोन/Phone: 022 - 2266 0502

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