RBI: Recovery agents can’t call borrowers before 8 am, after 7 pm

MUMBAI: The RBI on Thursday proposed stricter norms for recovery of overdue loans under which financial institutions and their recovery agents cannot call borrowers before 8 in the morning and after 7 in the evening.

Regulated Entities (REs) like banks and NBFCs should not outsource core management functions, including policy formulation and decision-making functions like determining compliance with KYC norms and according sanction for loans, said the ‘Draft Master Direction on Managing Risks and Code of Conduct in Outsourcing of Financial Services’.

“The underlying principle of the proposed directions is that the RE should ensure that outsourcing arrangements neither diminish its ability to fulfil its obligations to customers nor impede effective supervision by the supervisory authority,” the Reserve Bank of India said.

The draft said REs should put in place a board-approved code of conduct for Direct Sales Agents (DSA)/ Direct Marketing Agents (DMA)/ Recovery Agents (applicable to commercial banks, cooperative banks and NBFCs).

The REs should ensure that the DSA/DMA/Recovery Agents are properly trained to handle their responsibilities with care and sensitivity, particularly aspects, such as soliciting customers, hours of calling, privacy of customer information and conveying the correct terms and conditions of the products on offer. “The REs and their Recovery Agents shall not resort to intimidation or harassment of any kind, either verbal or physical, against any person in their debt collection efforts, including acts intended to humiliate publicly or intrude upon the privacy of the debtors’/their guarantors’ family members...,” the draft said.

BoxCredit information companies (CICs) will have to pay a compensation of Rs 100 per day to customers for delays in updation or rectification of their credit information, the RBI said on Thursday. Credit institutions (CIs) and CICs have been given six months to put in place the necessary systems and processes to implement the ‘Framework for compensation to customers for delayed updation/rectification of credit information’, the RBI directed the CICs and CIs via a circular.

Info delay: CICs to pay Rs 100/day

Credit information companies (CICs) will have to pay a compensation of Rs 100 per day to customers for delays in updation or rectification of their credit information, the RBI said on Thursday. Credit institutions (CIs) and CICs have been given six months to put in place the necessary systems and processes to implement the ‘Framework for compensation to customers for delayed updation/rectification of credit information’, the RBI directed the CICs and CIs via a circular.

RBI tells banks to raise limit for non-callable term deposits to Rs 1 crore

The RBI has raised, with immediate effect, the minimum amount for offering non-callable term deposits (those with premature withdrawal facility) by banks to individuals from Rs 15 lakh to Rs 1 crore, a move aimed to benefit customers. The RBI issued a master direction to banks on Thursday, stating that all domestic term deposits accepted from individuals for amount of Rs 1 crore and below shall have premature withdrawal facility. Earlier the non-withdrawal clause was applicable to term deposits of Rs 15 lakh level. This will make it easier for bank customers to withdraw their funds in times of need. The RBI has further stated that these instructions shall also be applicable for Non-Resident (External) Rupee (NRE) Deposit / Ordinary Non-Resident (NRO) Deposits.