Outlook Money
Loan recovery agents are individuals employed by banks who collect outstanding debts from clients. They receive a small percentage of the total amount they successfully recover and are not involved in the initial agreement
Loans are more accessible now, allowing people to borrow for personal and professional purposes. However, crises often arise for the harsh treatment faced by the agents
The Reserve Bank of India (RBI) has laid guidelines for what the recovery agents can or cannot do
It is crucial to ensure that agents are adequately trained to handle their responsibilities with care and sensitivity. This includes aspects such as customer solicitation, calling hours, customer privacy, and accurately conveying the terms and conditions of the products offered
RBI, in its draft norms on "Managing Risks and Code of Conduct in Outsourcing of Financial Services," mentions that entities and their recovery agents should not use intimidation or harassment, whether verbal or physical, during debt collection efforts.
Agents often engage in harassment by frequently calling or visiting clients, and even humiliating them in public, all contributing to distress. Assistance from consumer bodies and civil courts can also be taken
Compiled by Syed Muskan