Regulatory Alerts2026-08-06
Added · Updated
Reserve Bank of India (Regional Rural Banks - Responsible Business Conduct) Fourth Amendment Directions, 2026
These Directions amend the Reserve Bank of India (Regional Rural Banks – Responsible Business Conduct) Directions, 2025, by inserting definitions for recovery agencies and agents and replacing paragraphs 428 to 437 with a new section on the conduct of Regional Rural Banks (RRBs) in loan recovery. RRBs are required to establish policies covering recovery triggers, due diligence, training, and codes of conduct, including mandating that recovery agents hold certificates from the Indian Institute of Banking and Finance (IIBF) within one year. The rules impose strict limits on technology-based recovery mechanisms, prohibiting the restriction of mobile device functionalities except for devices financed by the RRB, with gradual restrictions permitted only after 30 days past due and full restrictions after 60 days. Additionally, RRBs must compensate borrowers at ₹250 per hour for wrongful or delayed restrictions, capped at the loan disbursed amount, and enforce fair treatment standards such as limiting contact hours to 08:00–19:00 and banning harsh practices like abusive language or social media harassment.
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