Harassed by Loan Recovery Agents? Your Rights and Where to Complain

In short: A bank or finance company can ask you to repay. But its recovery agents must follow RBI rules. They cannot abuse you, threaten you, call at odd hours or shame you before family and colleagues. If they do, you can complain to the lender, then to the RBI Ombudsman, and to the police for threats. You still owe the loan, so try to settle it in writing.

The problem

You have missed loan, credit card or loan app payments. Recovery agents now call you many times a day. They call your family, friends or office. Some use abusive language, threaten you, or send messages calling you a “fraud”.

Example: A borrower in Bengaluru lost his job and missed three EMIs on a personal loan. Agents call him at 10 pm and message his colleagues. One agent says the police will arrest him tomorrow. This is harassment. A missed EMI is a civil matter. Police do not arrest anyone just for not paying a loan.

What recovery agents cannot do

RBI has told banks and finance companies that they are responsible for their recovery agents. Under RBI’s 2022 instructions on recovery agents, agents must not:

• call you before 8 am or after 7 pm;
• use abusive language, threats or intimidation, verbal or physical;
• humiliate you in public or disturb your privacy;
• contact your family, friends or colleagues to pressure you;
• send you or others inappropriate messages on phone or social media;
• make false or misleading statements about what will happen if you do not pay.

An agent who visits you should carry an identity card and an authorisation letter from the lender. You can ask to see both.

Stricter rules are coming. RBI has issued new directions for commercial banks that apply from 1 January 2027. They limit calls and visits to 8 am to 7 pm, require banks to record recovery calls, require the agency’s details to be given to you before the first visit, and list banned “harsh” practices such as posting your details on social media.

Loan apps: extra protection

Many harassment cases come from loan apps. Under RBI’s digital lending rules, a lending app linked to a regulated lender should not take access to your contacts, photos or call logs to harass you. Before borrowing, check that the app is linked to a bank or NBFC registered with RBI. If an app is not regulated, report it on RBI’s Sachet portal (sachet.rbi.org.in).

If an app or agent sends morphed photos, threatens to message your contacts, or blackmails you, report it to the cyber crime helpline 1930 or at cybercrime.gov.in.

When harassment becomes a crime

Some recovery conduct is also an offence under the Bharatiya Nyaya Sanhita, 2023 (BNS). For example:

• Criminal intimidation, such as threats to harm you or your family (Section 351, BNS);
• Intentional insult meant to provoke you (Section 352, BNS);
• Defamation, such as messages to others calling you a fraud (Section 356, BNS);
• Extortion, where money is taken by putting you in fear (Section 308, BNS);
• words or gestures meant to insult the modesty of a woman (Section 79, BNS).

What you can do – step by step

1. Keep a record. Note the date, time and number of each call. Save screenshots of messages. Ask the agent for their name, agency and authorisation letter.
2. Write to the lender. Send a written complaint to the bank’s or NBFC’s grievance redressal officer. Their details are on the lender’s website and loan papers. Ask the lender to stop the harassment and give the agency’s details.
3. Go to the RBI Ombudsman. If the lender rejects your complaint, or does not reply within 30 days, file a complaint under the RBI Integrated Ombudsman Scheme, 2021 at cms.rbi.org.in. You can also call RBI’s helpline 14448. Usually you must file within one year of the lender’s reply.
4. Complain to the police if there are threats, intimidating visits to your home, or messages to your contacts. If the police do not register your complaint, you can approach senior officers or the magistrate. See our guide on what to do if the police do not register an FIR.
5. Deal with the loan itself. Harassment does not cancel the loan. Ask the lender in writing for restructuring, a payment plan or a one-time settlement. Pay only through official channels and get a receipt.

Documents to keep

• Loan agreement, sanction letter and account statements
• Call logs, recordings (where lawful) and screenshots
• Names and numbers of agents, and any authorisation letters shown
• Copies of your complaints and the replies
• Any settlement offer or letter from the lender

Mistakes to avoid

• Paying cash to an agent without an official receipt from the lender.
• Ignoring letters from the lender itself. A legal notice, a SARFAESI notice or a court summons needs a reply in time. See what to do after a SARFAESI notice.
• Abusing the agent back. Stay calm. It keeps your complaint strong.
• Borrowing from another app to repay this one. This often makes things worse.

Common questions

Can a recovery agent come to my office?

Agents should not embarrass you before colleagues or pressure your employer. Under the new rules for commercial banks from 1 January 2027, a visit should be at a place you choose, and the workplace only in limited situations.

Can the police arrest me for not paying a loan?

Not paying a loan is generally a civil matter. The lender can file a recovery case, or use SARFAESI for a secured loan. Criminal cases arise only in specific situations, such as a bounced cheque or fraud. See cheque bounce under Section 138.

Where do I complain about a bank’s recovery agent?

First to the bank’s grievance officer in writing. Then, after 30 days or an unsatisfactory reply, to the RBI Ombudsman at cms.rbi.org.in. For threats, also to the police.

Can I complain in consumer court?

In some cases, yes, for deficiency in service by the lender. See consumer complaints against banks.

Contact

To speak to an advocate, call +91 63660 42792 or email contact@baselegal.in. You can also send us a message. Read more about our Banking, SARFAESI & DRT practice and how we handle online fraud refunds.

This article is for general information only. It is not legal advice. Please speak to an advocate about your own case.