The Reserve Bank of India has issued its Third Amendment Directions for Non-Banking Financial Companies (NBFCs), focusing on responsible business conduct with regards to the hiring of recovery agents.
RBI's Third Amendment on NBFCs Responsible Business Conduct
On August 6, 2026, the Reserve Bank of India announced the Third Amendment Directions for Non-Banking Financial Companies (NBFCs). This includes updated provisions regarding the engagement of recovery agents, positioned under Chapter III of the Responsible Business Conduct guidelines.
The guidelines stipulate that NBFCs must adhere to ethical practices when employing recovery agents, minimizing consumer distress and ensuring that recovery efforts align with prescribed conduct principles. The RBI's objective is to promote responsible lending and recovery practices across the financial sector.
Stakeholders in the NBFC sector must familiarize themselves with these updates to avoid potential regulatory repercussions linked to consumer rights violations stemming from improper practices by recovery agents.
Citations
- Reserve Bank of India (Non-Banking Financial Companies - Responsible Business Conduct) Third Amendment Directions (2026)