**Executive Summary**
The Reserve Bank of India (RBI) issued draft Amendment Directions on February 12, 2026, concerning the conduct of regulated entities in loan recovery and the engagement of recovery agents. This initiative expands upon existing instructions for Scheduled Commercial Banks and Housing Finance Companies to include all regulated entities. Public comments on these draft directions are requested by March 6, 2026.
**Key Points / Main Content**
* **Purpose:** To issue comprehensive instructions to all regulated entities on matters related to conduct in loan recovery and engagement of recovery agents.
* **Scope:** The instructions cover aspects such as:
* Fair treatment of borrowers
* Conduct of lender's employees and recovery agents
* Due diligence
* Training
* Code of conduct for recovery agents.
* **Specific Draft Amendment Directions issued:**
* Reserve Bank of India (Commercial Banks - Responsible Business Conduct) Second Amendment Directions, 2026
* Reserve Bank of India (Small Finance Banks - Responsible Business Conduct) Second Amendment Directions, 2026
* Reserve Bank of India (Local Area Banks - Responsible Business Conduct) Second Amendment Directions, 2026
* Reserve Bank of India (Regional Rural Banks - Responsible Business Conduct) Second Amendment Directions, 2026
* Reserve Bank of India (Urban Co-operative Banks - Responsible Business Conduct) Second Amendment Directions, 2026
* Reserve Bank of India (Rural Co-operative Banks - Responsible Business Conduct) Second Amendment Directions, 2026
* Reserve Bank of India (All India Financial Institutions - Responsible Business Conduct) Second Amendment Directions, 2026
* Reserve Bank of India (Non-Banking Financial Companies - Responsible Business Conduct) Second Amendment Directions, 2026
* Reserve Bank of India (Housing Finance Companies) Second Amendment Directions, 2026
* **Feedback Mechanism:** Comments and feedback on the draft Amendment Directions may be submitted by March 6, 2026, through either:
* The 'Connect 2 Regulate' section on the RBI website.
* Via email with a specified subject line.
**Impact Analysis**
**Regulated Entities**
*Impact:* These entities must adhere to the new comprehensive instructions regarding loan recovery and recovery agent engagement, ensuring fair treatment and compliance with the outlined conduct standards.
*Action Required:* Review the draft Amendment Directions and provide feedback to the RBI by March 6, 2026, via the specified channels.
**Members of the Public/Other Stakeholders**
*Impact:* As stakeholders in the financial system, these parties have an interest in the fairness and ethical conduct of loan recovery processes.
*Action Required:* Review the draft Amendment Directions and provide feedback to the RBI by March 6, 2026, via the specified channels.
Key Entities Referenced
Reserve Bank of India (RBI): The central bank issuing draft amendment directions regarding conduct of regulated entities in recovery of loans.
Amendment Directions for ‘Conduct of Regulated Entities in Recovery of Loans and Engagement of Recovery Agents': Draft guidelines issued by RBI pertaining to the conduct of regulated entities and recovery agents in loan recovery processes.
Statement on Developmental and Regulatory Policies: A statement released by the RBI on February 6, 2026, which led to the issuance of the draft amendment directions.
प्रेस प्रकाशनी PRESS RELEASE
भारतीय ररज़र्व ब ैंक
RESERVE BANK OF INDIA
वेबसाइट : www.rbi.org.in/hindi संचार वर्भाग, केंद्रीय कायाालय, शहीद भगत ससिंह मागा, फोटा, म िंबई - 400 001
Website : www.rbi.org.in Department of Communication, Central Office, Shahid Bhagat Singh Marg, Fort,
ई-मेल/email : helpdoc@rbi.org.in Mumbai - 400 001 फोन/Phone: 022 - 2266 0502
February 12, 2026
RBI Issues Draft Amendment Directions for ‘Conduct of Regulated Entities in
Recovery of Loans and Engagement of Recovery Agents’
Detailed instructions on matters related to engagement of recovery agents have
been issued to Scheduled Commercial Banks (excluding Regional Rural Banks) and
Housing Finance Companies currently. Upon a review, it has been decided to issue
comprehensive instructions to all regulated entities on conduct related matters in
recovery of loans and engagement of recovery agents, which inter alia cover aspects
such as fair treatment to borrowers during recovery process, conduct of lender’s
employees and recovery agents, due diligence, training, code of conduct for recovery
agents, etc.
2. Accordingly, in pursuance of the announcement made in the Statement on
Developmental and Regulatory Policies dated February 6, 2026, the Reserve Bank of
India (RBI) has today issued the following draft Amendment Directions for public
comments, which propose to amend existing Directions issued by the Department of
Regulation, RBI.
(i) Reserve Bank of India (Commercial Banks - Responsible Business
Conduct) Second Amendment Directions, 2026
(ii) Reserve Bank of India (Small Finance Banks - Responsible Business
Conduct) Second Amendment Directions, 2026
(iii) Reserve Bank of India (Local Area Banks - Responsible Business
Conduct) Second Amendment Directions, 2026
(iv) Reserve Bank of India (Regional Rural Banks - Responsible Business
Conduct) Second Amendment Directions, 2026
(v) Reserve Bank of India (Urban Co-operative Banks - Responsible Business
Conduct) Second Amendment Directions, 2026
(vi) Reserve Bank of India (Rural Co-operative Banks - Responsible Business
Conduct) Second Amendment Directions, 2026
(vii) Reserve Bank of India (All India Financial Institutions - Responsible
Business Conduct) Second Amendment Directions, 2026
(viii) Reserve Bank of India (Non-Banking Financial Companies - Responsible
Business Conduct) Second Amendment Directions, 2026
(ix) Reserve Bank of India (Housing Finance Companies) Second Amendment
Directions, 20262
3. The comments / feedback on the draft Amendment Directions may be submitted
by the regulated entities and members of public / other stakeholders on or before
March 6, 2026 through the following channels:
i) the ‘Connect 2 Regulate’ section on the website by following the
corresponding hyperlink provided against each document in the page where
they are hosted; or
ii) by email with the subject line ‘Feedback on (full name of the draft Amendment
Directions (including the type of Regulated Entity))’.
(Brij Raj)
Press Release: 2025-2026/2099 Chief General Manager