The RBI has amended the Third Amendment Directions concerning Responsible Business Conduct for Non-Banking Financial Companies. This update addresses engagement with recovery agents and reinforces ethical business practices.
RBI Updates Responsible Business Conduct Guidelines for NBFCs
On August 6, 2026, the Reserve Bank of India (RBI) introduced the Third Amendment Directions related to Responsible Business Conduct for Non-Banking Financial Companies (NBFCs). The new directions particularly focus on the proper engagement protocols for recovery agents.
This amendment is part of the RBI's broader strategy to enhance consumer protection by ensuring that recovery procedures align with ethical standards and fair practices within the finance sector. The revised guidelines impose stricter regulations on how NBFCs may engage recovery agents, emphasizing the need for transparency and accountability in their actions.
The changes compel NBFCs to review their recovery operations and adopt practices that comply with the revised directions. Financial entities are advised to establish robust frameworks for recovery operations, including training programs for agents on ethical conduct.
For legal professionals working with NBFCs, this amendment necessitates a diligent approach to compliance and risk management. Firms must ensure their clients understand the implications of these changes and proactively adapt their operations to avoid potential liabilities stemming from non-compliance.
Citations
- RBI Notification (2026) RBI/2026-27/230
