Key RBI Proposals: No Recovery Calls 8 am-7 pm, Flexible FDs up to Rs 1 Cr

The Reserve Bank of India (RBI) has issued various guidelines, keeping in mind the safety and convenience of customers, especially concerning loan recovery overcalls. According to RBI’s instructions, recovery agents can only call customers between 8 AM and 7 PM, avoiding early mornings and late evenings.

Additionally, banks and NBFCs are prohibited from outsourcing essential functions like policy determination, KYC norms, and loan approvals. RBI has provided these proposals in the draft of the Managing Risks and Code of Conduct in Outsourcing Financial Services.

RBI has also given instructions regarding the privacy of loan customers. Customers must be informed of all terms and conditions before obtaining loan approval. RBI has advised related stakeholders to submit feedback on these proposals until November 28, 2023.

Penalties for Delayed CIBIL Report Updates

Credit Information Companies (CICs) and Credit Institutions (CIs) may face penalties if they do not update a customer’s CIBIL score in a timely manner. RBI has directed that if a customer raises a dispute regarding their CIBIL score, it should be resolved within 30 days. Failure to do so will result in a daily fine of Rs. 100, and these penalties will be imposed without exception. Notably, correcting a CIBIL report can be a time-consuming process, particularly if it contains incorrect information that negatively affects the score.

Increase in Term Deposit Limits

Customers can now deposit amounts exceeding 15 lakhs up to 1 crore without any penalty. This feature is applicable to term deposits, and it allows for the accumulation of various interest rates without any premature withdrawal penalties. RBI has issued these instructions, which apply to all commercial and cooperative banks. Additionally, banks can offer various term deposit schemes with different interest rates without the need for prior approval from the RBI.

Recovery Agents Cannot Threaten or Harass Through Phone or Social Media

RBI has clarified that recovery agents cannot threaten or harass customers through mobile phones or social media. They are not allowed to engage in non-constructive conversations with customers, and making intimidating calls is strictly prohibited. Recovery agents are required to respect the privacy of loan customers and cannot engage in threatening behavior. RBI emphasizes the importance of safeguarding customer information and ensuring that customers are not intimidated.