Your rights against a recovery agent

Source :Bindisha Sarang :livemint:6 Feb 2012


If you happen to default on your loan due to unavoidable circumstances, 
you must know your rights 



Banks’ non-performing assets (NPAs) are on the rise and how. Consequently, to keep the NPAs under check, there is a possibility that banks will shift gears as far as recovery activities go even for retails loans such as home loan, personal loan and credit card debt. Of course, one should never bring oneself to a point where he/she has to face a recovery agent.


But if you happen to default on your loan due to unavoidable circumstances, you must know your rights. Of course a recovery agent is supposed to get you to pay all the dues, but there are certain things he can can’t do during the recovery process. 


The Reserve Bank of India (RBI) has issued guidelines on training recovery agents and the methods they can adopt for collection. “Recovery Agents engaged by Banks” guidelines were issued by RBI on 24 April 2008.


 As per the annual report on banking ombudsman, 2009-10, as many as 1,609 complaints were received against direct selling agents and recovery agents put together. Here’s a list of what recovery agents can’t do.
Can’t refuse to reveal his identity


To start with, always check the identity card of the recovery agent to avoid harassment of any kind by an unknown person. This card is issued by your bank or issued under the authority of the bank. A recovery agent can’t refuse to show this card if you demand so.


Can’t breach your privacy


Recovery agents are mandated to follow certain privacy rules and can’t discuss your debt with your neighbours or employers. Therefore, they can’t threaten you with that. If they do so, you can register a complaint against him with your bank.


Can’t call you up at odd hours or at untimely occasions


If the recovery agent calls you at odd hours, early morning or late at night, you are under no obligation to entertain such calls. As per RBI guidelines, recovery agents should contact you between 7am and 7pm.


 In addition, if you do not want calls at a particular place, such as your workplace, you can ask the agent to get in touch with you at home. In case you work in shifts, the agent may call you up at any other appropriate time specified by you.


If there is a death in your family or any such event, you can tell the agent not to call you or make visits for a few days.


Can’t use abusive language


At times recovery agents need to be firm to collect pending dues, but that does not mean they are allowed to use abusive language. If the recovery agents crosses the line of decency, report his behaviour to the bank.


If the respective bank doesn’t heed your complaint against the agent or you are not satisfied by its response, you can get in touch with the banking ombudsman.