**Executive Summary**
The Reserve Bank of India (RBI) issues the Second Amendment Directions, 2026 for Housing Finance Companies (HFCs) to update instructions on loan recovery and engagement of recovery agents. These directions come into effect on July 1, 2026, modifying the Reserve Bank of India (Housing Finance Companies) Directions, 2025. The amendment aims to align HFC practices with responsible business conduct guidelines for NBFCs.
**Key Points / Main Content**
* **Purpose:** To revise instructions regarding loan recovery and engagement of recovery agents by HFCs.
* **Applicability:** Applies to all Housing Finance Companies (HFCs).
* **Effective Date:** The directions are effective from July 1, 2026.
* **Modification of Existing Directions:** The Second Amendment Directions modify the Reserve Bank of India (Housing Finance Companies) Directions, 2025.
* **Fair Practices Code Amendment:**
* Sub-section A.15, related to Guidelines for engaging Recovery Agents, is deleted from Chapter-X on 'Fair Practices Code'.
* Paragraph 170 under Chapter-X on 'Fair Practices Code' is deleted.
* A new sub-section A.15A, "Conduct of HFCs in Recovery of Loans and Engagement of Recovery Agents" is created.
* A new paragraph 170A is created.
* **Compliance Requirement:** HFCs must comply with paragraphs 100A to 100W under Chapter III of the Reserve Bank of India (Non-Banking Financial Companies – Responsible Business Conduct) Directions, 2025.
**Impact Analysis**
**Stakeholder: Housing Finance Companies (HFCs)**
* **Impact:** Need to update their loan recovery and agent engagement practices to align with the new directions.
* **Action Required:**
* Revise policies and procedures for loan recovery and agent engagement to comply with the new sub-section A.15A and paragraph 170A in Chapter-X on 'Fair Practices Code'.
* Ensure compliance with paragraphs 100A to 100W under Chapter III of the Reserve Bank of India (Non-Banking Financial Companies – Responsible Business Conduct) Directions, 2025.
* Train staff on the updated policies and procedures.
Key Entities Referenced
Reserve Bank of India (Housing Finance Companies) Directions, 2025: The existing guidelines for Housing Finance Companies regarding recovery of loans and engagement of recovery agents.
Draft Reserve Bank of India (Housing Finance Companies) Second Amendment Directions, 2026: The policy document being examined, which amends the 2025 directions for Housing Finance Companies.
Reserve Bank of India (Non-Banking Financial Companies – Responsible Business Conduct) Directions, 2025: Instructions on conduct related matters in recovery of loans and engagement of recovery agents to all NBFCs, excluding Mortgage Guarantee Companies
National Housing Bank Act, 1987: The Act that gives the Reserve Bank the power to issue the amendment directions.
Housing Finance Companies (HFCs): The entities regulated by this policy.
DOR.MCS.REC.No. /01-01-039/2025-26 February 12, 2026
Draft Reserve Bank of India (Housing Finance Companies) Second Amendment
Directions, 2026
Certain instructions on matters related to recovery of loans and engagement of
recovery agents by Housing Finance Companies (HFCs) have been issued to HFCs
under Chapter-X on ‘Fair Practices Code’ of the Reserve Bank of India (Housing
Finance Companies) Directions, 2025. The extant instructions have since been
reviewed. It has also been decided to issue comprehensive instructions on conduct
related matters in recovery of loans and engagement of recovery agents to all NBFCs,
excluding Mortgage Guarantee Companies, Core Investment Companies, NBFC-
Account Aggregators, Standalone Primary Dealers, Non-Operating Financial Housing
Companies, and NBFCs not having any customer interface, under the Reserve Bank
of India (Non-Banking Financial Companies – Responsible Business Conduct)
Directions, 2025.
2. In exercise of the powers conferred by Section 30A of the National Housing Bank
Act,1987, the Reserve Bank, being satisfied that it is necessary and expedient in public
interest so to do, hereby issues the Amendment Directions hereinafter specified.
3. Short Title and Commencement
(1) These Directions shall be called the Reserve Bank of India (Housing Finance
Companies) Second Amendment Directions, 2026.
(2) These Directions shall come into effect on July 1, 2026.
4. These Amendment Directions shall modify the Reserve Bank of India (Housing
Finance Companies) Directions, 2025 as under:
In Chapter-X on ‘Fair Practices Code’, the sub-section A.15 Guidelines for
engaging Recovery Agents and paragraph 170 thereunder shall be deleted and
substituted with a new sub-section and paragraph as under:
“A.15A Conduct of HFCs in Recovery of Loans and Engagement of
Recovery Agents170A. An HFC shall ensure compliance with the provisions of paragraphs 100A
to 100W under Chapter III of Reserve Bank of India (Non-Banking Financial
Companies – Responsible Business Conduct) Directions, 2025.”
(Veena Srivastava)
Chief General Manager
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