Frequently Asked Questions

Empowering You with Legal Protection in Banking & Debt Matters Always Remember

“Defaulting on a loan is not a crime but harassing a borrower is a crime.”
At Legal Parth Associates, we make sure your legal rights are not just known, but enforced.

  • As per RBI’s Fair Practice Code, recovery agents cannot intimidate, threaten, or harass borrowers.
  • Recovery calls are permitted only between 7:00 AM and 7:00 PM.
  • The borrower must be informed in writing before any visit by a recovery agent.
  • Lenders must ensure agents display valid ID cards and authorization letters from the bank/NBFC during visits.
  • The Court held that no bank can forcibly seize or repossess property without following due legal process.
  • Banks must initiate legal recovery channels (civil suit, arbitration, or DRT proceedings) — not private musclemen or unauthorized agents.
  • This judgment reaffirmed that borrowers are entitled to dignity, privacy, and lawful process even in case of default.
  • As per RBI guidelines, a borrower may choose a preferred location for meeting or communication with recovery agents — especially in cases of disability, health issues, or special circumstances.
  • The lender must record and respect this preference before sending any representative.
  • No agent or bank official can enter your home or workplace without:
  • Prior written appointment or visiting authorization letter, and
  • Your explicit consent.
  • Unauthorized entry or repeated visits constitute criminal trespass and harassment under Sections 351 & 352 of the Bharatiya Nyaya Sanhita (BNS), 2023.
  • Borrowers can appoint a lawyer or authorized representative to handle all communication with the bank.
  • Every borrower has the right to negotiate a one-time settlement (OTS) or restructuring offer under RBI resolution framework.
  • Lenders cannot deny settlement or threaten with DRT or civil action to coerce payment.

If you face threats, abusive language, or privacy breach by recovery agents:

  • Lodge a complaint with the Bank’s Grievance Redressal Officer.
  • Escalate to the RBI Ombudsman if not resolved within 30 days.
  • Legal Parth Associates can file criminal complaints for intimidation and breach of RBI codes.
  • Defaulters facing unfair practices can file complaints under the Consumer Protection Act for mental harassment or deficiency in service.
  • MSMEs can raise payment or contract disputes before MSME Facilitation Councils for quick redressal without court litigation.