**Executive Summary**
The Reserve Bank of India issues the "Draft Reserve Bank of India (Housing Finance Companies) Second Amendment Directions, 2026" concerning loan recovery and engagement of recovery agents by Housing Finance Companies (HFCs). These directions, effective from July 1, 2026, amend the Reserve Bank of India (Housing Finance Companies) Directions, 2025, in alignment with instructions for NBFCs.
**Key Points / Main Content**
* **Purpose:** To issue comprehensive instructions on conduct-related matters in recovery of loans and engagement of recovery agents.
* **Scope:** Applies 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.
* **Effective Date:** July 1, 2026.
* **Amendment Details:**
* In Chapter-X on 'Fair Practices Code', the sub-section A.15 Guidelines for engaging Recovery Agents and paragraph 170 thereunder shall be deleted.
* Replaced by a new sub-section “A.15A Conduct of HFCs in Recovery of Loans and Engagement of Recovery Agents”
* New Paragraph 170A is introduced: All HFCs 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.
**Impact Analysis**
**Stakeholder: Housing Finance Companies (HFCs)**
* **Impact:** HFCs must adhere to the amended directions concerning loan recovery and the engagement of recovery agents, aligning with the standards set for NBFCs.
* **Action Required:** HFCs must update their practices to comply with the new sub-section A.15A and paragraph 170A, ensuring alignment with paragraphs 100A to 100W under Chapter III of Reserve Bank of India (Non-Banking Financial Companies – Responsible Business Conduct) Directions, 2025.
**Stakeholder: Recovery Agents**
* **Impact:** Recovery agents must adhere to the conduct specified within the revised guidelines.
* **Action Required:** Familiarise with the new guidelines to ensure they are compliant with the new directions.
Key Entities Referenced
Reserve Bank of India (Housing Finance Companies) Directions, 2025: The original directions governing Housing Finance Companies issued by the Reserve Bank of India.
Draft Reserve Bank of India (Housing Finance Companies) Second Amendment Directions, 2026: The document containing amendments to the existing regulations for Housing Finance Companies, focusing on loan recovery and agent engagement.
National Housing Bank Act, 1987: The act that provides the Reserve Bank with powers to issue the amendment directions.
Reserve Bank of India (Non-Banking Financial Companies – Responsible Business Conduct) Directions, 2025: RBI directions extended to HFCs regarding responsible business conduct.
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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