Mint Explainer | RBI’s loan recovery rules: What changes for banks, borrowers

What does this mean for banks?

Banks will now have to keep a close watch on how recovery agencies treat borrowers and defaulters and nip any untoward situation in the bud. The August norms will modify the broader guidelines on banks’ responsible business conduct issued in November 2025. Those guidelines placed the onus for the conduct of recovery agents on banks. RBI has said it will take complaints against banks’ recovery agents seriously. For the first time, the regulator has drawn a clear and enforceable line between recovery and harassment, said Ananth Shroff, co-founder and chief executive of debt collection platform DPDzero. He said the real challenge is ensuring these safeguards are followed consistently across millions of borrower interactions.