In the context of customer service, the attention of the Reserve Bank of India (RBI) is the harsh recovery methods used by certain lenders, without having adequate checks and controls over their recovery agents, said governor Shaktikanta Das on Friday adding that the central bank will take serious action in cases where regulated entities are involved.
Das said deploying harsh recovery methods like calling up at odd hours or using foul language is “unacceptable” and assured that the RBI is paying “serious attention” to such happenings to ensure necessary action is taken to curb such activities.
“We have received complaints of customers being contacted by recovery agents at odd hours, even past midnight. There are also complaints of recovery agents using foul language. Such kind of actions by recovery agents are unacceptable and pose reputational risk for the financial entities themselves,” Das said while speaking at Modern BFSI Summit 2022 organised by FE.
He said most of such instances are reported from unregulated entities, but added that the central bank has also come across such tactics being used by entities regulated by the RBI, and urged all players to give special attention to the same.
The comments came at a time when there have been allegations of suicides by many borrowers triggered by harsh recovery practices by agents.
“We have taken serious note of such instances and will not hesitate to take stringent action in cases where regulated entities are involved. Such complaints against unregulated entities will have to be taken up with appropriate law enforcement agencies,” the governor added.
Further, the RBI has recently set up of a Committee for Review of Customer Service Standards in the RBI Regulated Entities (REs) which would inter alia review the emerging and evolving needs of the customer service landscape, especially in the context of evolving digital financial products and their distribution, and suggest measures for strengthening the overall consumer protection framework.
The central bank will continue with its role to foster innovation while trying to contain the systemic challenges, he said, adding that the RBI will soon come out with a discussion paper on digital lending.
The increasing use of technology and digital services has led to more incidents of digital frauds and customer dissatisfaction, he said, adding that the recommendations of the RBI Working Group on digital lending in this area are under examination for issuance of guidelines.
