RBI Governor Shaktikanta Das said the need of the hour is to ensure safety following a process of whitelisting and due diligence by the regulated entities.
RBI also said it has observed that recovery agents are deviating from its instructions with regard to the recovery of loans.
On the directives of the higher officials, it has issued loan recovery notices to all the defaulters as well as to their guarantors.
A reminder on how widespread harassment by recovery agents is. There have been many similar cases in Andhra Pradesh in recent times.
Loan-offering apps require access to the contacts of the applicant. In case the s/he defaults, the recovery agents get in touch with the alternative contacts and others in the loanee’s contact list.
Being called a 'rapist' in messages sent to all the borrower's contacts is just one of the milder derogatory terms used.
The RBI circular asks banks to identify projects with even a day's default as stressed assets, and conclude resolution proceedings in 180 days.
Banks placed under Prompt Corrective Action can be restricted from expanding the number of branches, staff recruitment and increasing the size of their loan book.