India, Aug. 7 -- In a major relief to borrowers, the Reserve Bank of India (RBI) has issued new rules which prohibit loan recovery agents from using harsh measures, such as use of abusive language, excessive calling or use of violence. The Central bank on Thursday announced new norms on conduct of lenders and recovery agents during retrieval of loan dues. These rules come amid rising complaints of harassment faced by borrowers over calls and social media platforms.

While RBI already prohibited phone calls at odd hours or use of muscle power, the new guidelines have expanded the spectrum of what amounts to harsh methods and must be avoided. The Central bank has restricted bank employees and recovery agents from using threatening or abusiv...