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Banks are advised to consider the following specific considerations when using collection agencies:
(i) In these guidelines, "agent" includes agencies employed by the bank and representatives/employees of the relevant agencies.
(ii) Banks should have an appropriate due diligence process for hiring collection agents and should be structured to include, among other things, those involved in the collection process. The detailed procedure should generally follow the RBI Guidelines on Outsourcing of Financial Services vide Circular DBOD.No.BP.
0/ 21.0
.158/ 2006-07 dated November 3, 2006. In addition, banks should ensure the involvement of agents. they very carefully conduct background checks on their employees in the recovery process, which may include pre-employment police checks. Banks can decide how often to use re-verification of previous transactions.

(iii) To ensure proper notification and proper authorization, banks should inform the borrower about the details of debt collectors/companies while forwarding the default cases to the collection agency. In addition, since in some cases the borrower

may not have received information about the recovery office to ensure refusal / absence / avoidance and identity, it would be appropriate for the agent to also carry a copy of the notification and the power of attorney from the bank. and an identification card issued to him by a bank or broker/company. In addition, if the bank changes the debt collection company during collection, the new agent, in addition to notifying the borrower of the change, must bring a letter of notification and a power of attorney together with an identity card.

(iv) In addition to other information, the notification and power of attorney must also include the telephone numbers of the respective debt collection company. Banks must ensure that the content/text of calls made by recyclers to customers and vice versa are recorded on audio tape. Banks can take reasonable precautions, such as notifying the customer that the conversation is being recorded, etc.

(v) The Bank's website may also publish up-to-date information on the collection agencies/companies used by the Bank.

(vi) Once a complaint/appeal has been filed, banks should not refer cases to recovery agencies until they have finally disposed of all complaints raised by the borrower concerned. However, if the bank is satisfied with adequate evidence that the borrower is continuously making frivolous / vexatious complaints, it can continue the recovery process through the collection agents even if they have a complaint / complaint. In cases where the object of the borrower's payments may be legally binding, banks must be extremely careful when referring the matter to debt collection companies, depending on the circumstances.

 (vii) Every bank should have a mechanism through which the grievances of borrowers related to the recovery process can be redressed. The details of the mechanism must also be communicated to the borrower at the same time as the recovery agency's information as per iii above.
Incentives for Debt Collectors.
(viii) Some banks set very strict collection targets or offer large incentives to debt collectors. These, in turn, led debt collectors to use threatening and questionable methods of collecting payments. Therefore, banks are advised to ensure that agreements with collection agents do not lead to uncivilized, illegal, and questionable activities or collection processes.


(ix) Reference is invited to (a) Circular DBOD.Leg.No.BC.10/ 09.07.007 /2002-03 dated 5th May 2003 regarding Guidelines on Code of Fair Practice for Lenders. (b) Circular DBOD.No. BP. 0/ 21.0.158/ 2006-07 of November 3, 2006 on the outsourcing of financial services and (c) Master Circular of July 2, 2007 DBOD.FSD.BC.17/ 2.01.011/2007- 08 on credit card operations. Further, regarding collection of charges, read Section 6 of the Bank's Code of Customer Obligations (BCSBI Code) Banks are advised to strictly adhere to the above guidelines/code for loan recovery.

(x) As per clause 5.7.1 of our circular DBOD.NO. BP. 0/ 21.0.158/ 2006-07 3.11.2006 regarding the guidelines for the outsourcing of financial services risk management of banks and the operating system, banks were called to ensure that, among other things, recycling employees are properly trained to fulfill their obligations. carefully and sensitively, especially aspects such as call times, customer data privacy, etc.

 (xi) The Reserve Bank has asked the Banks Association of India in collaboration with the Indian Institute of Banking and Finance (IIBF) to prepare a certificate course for direct rehabilitation staff with a minimum of 100 hours of training. After the IIBF introduced the above course, banks must ensure that within a year all their collection agents undergo the above training and get certified by the above institute. In addition, the service providers employed by the banks should also employ only people who have completed the said training and are certified by IIBF. Considering that a large number of agents across the country may require training, other institutes/banking training institutes may provide training to returning agents through an agreement with the  Indian Institute of Banking and Finance. that educational standards are consistent. However, every delegate must pass the All-India Test conducted by the IIBF.

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