Regulatory Alerts2026-08-06
Added · Updated
Reserve Bank of India (Rural Co-operative Banks - Responsible Business Conduct) Fourth Amendment Directions, 2026
These Directions amend the 2025 Responsible Business Conduct framework for Rural Co-operative Banks (RCBs) by deleting paragraphs 369 to 378 and inserting new provisions governing loan recovery and the engagement of recovery agencies. RCBs are required to establish policies for recovery, conduct due diligence on agencies, and ensure agents hold IIBF certification, while also mandating the public disclosure of empanelled agencies and call recordings. The text imposes strict operational constraints on technology-based recovery mechanisms, permitting device functionality restrictions only for financed devices after 30 days past due, with full restrictions allowed only after 60 days, and stipulates a compensation rate of ₹250 per hour for wrongful restrictions. Additionally, the Directions define prohibited harsh recovery practices, enforce civil conduct standards for agents, and require RCBs to maintain dedicated grievance redressal mechanisms for borrowers.
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