New Delhi, Aug. 10 -- Managing personal loans or home loan EMIs can be stressful. Missing due dates or defaulting on repayments carries serious implications, including the risk of being pursued by recovery agents. Borrowers must have a repayment strategy before applying for loans.

The Reserve Bank of India (RBI) has now issued new directions to protect borrowers from intrusive loan-recovery practices. The guidelines, titled Conduct of Regulated Entities in Recovery of Loans and Engagement of Recovery Agents, were issued on 6 August and will take effect from 1 January 2027.

The framework sets strict limits on how banks and recovery agents can contact borrowers, use personal data and deploy technology to recover unpaid dues.

Banking inst...