On 20th May 2026, the Reserve Bank of India released the “Draft Amendment Directions on ‘Conduct of Regulated Entities in Recovery of Loans and Engagement of Recovery Agents'” (hereafter “Draft Amendments”). The Draft Amendments provide detailed guidance to relevant regulated entities (REs) on the loan recovery process, including mandatory certification for recovery agents, safeguards against harassment, grievance redressal mechanisms, and compensation for wrongful use of technology-based mechanisms.
We believe the Draft Amendments are a step in the right direction and appreciate the RBI’s efforts to revisit the framework and incorporate stakeholder feedback through this revised draft.
At the same time, certain aspects of the Draft Amendments would benefit from additional clarification and deferred implementation. In particular, we submit that: (i) the framework should more explicitly address the repossession of assets financed through unsecured credit facilities; and (ii) the provisions permitting technology-based mechanisms for restricting or disabling mobile device functionalities (“digital kill switches”) should be operationalised only after the establishment of a more comprehensive governance framework addressing consumer protection, cybersecurity, vendor oversight, and the prudential treatment of such arrangements. We elaborate on these concerns in the full submission linked here.
