The Reserve Bank of India has issued the third amendment directions for Housing Finance Companies, focusing on the engagement of recovery agents. The new instructions revise the existing Fair Practices Code.
Amendments Issued for Housing Finance Companies by RBI
The Reserve Bank of India (RBI) has released the third amendment directions for Housing Finance Companies (HFCs). The amendment primarily addresses the engagement of recovery agents, revising existing standards under the Fair Practices Code established in 2025.
This update includes a review of the previously set instructions governing the operations and responsibilities of recovery agents, ensuring enhanced accountability and transparency in the recovery process. The RBI emphasizes the importance of ethical practices in financial transactions, particularly in sensitive areas such as loan recoveries.
By implementing these amendments, the RBI aims to reinforce consumer protection and encourage fair treatment of borrowers. The instructions will require HFCs to evaluate their recovery strategies and ensure compliance with the new provisions.
Legal professionals advising housing finance companies must stay apprised of these changes, as they will shape the operational protocols for HFCs and necessitate revisions in compliance frameworks moving forward.
Citations
- RBI Notification No. DOR.MCS.REC.No.201/01-01-039/2026-27