Regulatory Alerts2026-08-06
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Reserve Bank of India (All India Financial Institutions - Responsible Business Conduct) Third Amendment Directions, 2026
The Reserve Bank of India amends the 2025 Directions to impose comprehensive conduct rules on All India Financial Institutions (AIFIs) regarding loan recovery and the engagement of recovery agencies. AIFIs must establish policies covering due diligence, IIBF certification for agents, and compensation for borrowers, while strictly regulating technology-based device locking mechanisms with specific timelines and a ₹250 per hour compensation cap for wrongful restrictions. The Directions also mandate disclosure of agency details, restrict recovery visits to 08:00–19:00 hours, prohibit harsh practices, and require the preservation of call recordings for six months. These amendments come into effect on January 1, 2027.
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