The Reserve Bank of India has issued the Third Amendment Directions for Housing Finance Companies, focusing on the engagement of recovery agents. This amendment is part of the ongoing enforcement of the Fair Practices Code.
RBI's Third Amendment for Housing Finance Companies
On August 6, 2026, the Reserve Bank of India (RBI) issued the Third Amendment Directions targeted at Housing Finance Companies (HFCs). The amendment specifically revises instructions regarding the engagement of recovery agents under the Fair Practices Code.
This amendment reflects the RBI's commitment to ensuring fair treatment and responsible conduct in recovery practices by HFCs. Enhanced guidelines seek to protect borrowers’ interests and promote transparent recovery processes.
HFCs are now required to adhere to stricter protocols when employing recovery agents, which includes clear delineations of agent responsibilities and borrower engagement strategies. This review of existing instructions demonstrates a proactive approach by the RBI towards borrower rights.
Legal practitioners in the housing finance sector should familiarize themselves with these updated norms as they could significantly affect compliance requirements and operational strategies of HFCs going forward.
Citations
- RBI Housing Finance Companies Directions (2026)