How to Improve Your CIBIL Score After Debt Settlement?
September 4, 2025
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Do you know that as of 2025, banks and NBFCs can no longer send recovery agents to your doorstep without your consent—or even call you before 8 AM or after 7 PM? Thanks to the Reserve Bank of India’s updated policies, aggressive debt recovery practices are being reined in like never before. With borrower complaints on the rise, the RBI has released stringent new norms that hold lenders and their agents accountable. These latest changes could very well be the turning point for Indian borrowers battling loan-related stress.
A borrower under financial duress would know how debt collection can shake people mentally, emotionally, and financially. But 2025’s RBI Guidelines for Loan Recovery offer a real chance to shift the balance of power—back into the hands of borrowers. And if you’re navigating a tough financial patch, knowing these rules could be the edge you need.
In recent years, India’s digital lending boom created a troubling shadow—one where untrained recovery agents, especially from lesser-known apps, began crossing ethical and legal lines. Harassment, public shaming, and even suicide cases made headlines. Borrowers, already facing financial hardship, found themselves overwhelmed by loan recovery tactics that went too far.
RBI took note. The 2025 update to the RBI loan recovery process addresses these challenges head-on—laying down a code of conduct that emphasizes dignity, accountability, and legal protection for borrowers in India.
Let’s decode the new RBI guidelines on loan recovery and see exactly how they’re reshaping the landscape for both lenders and borrowers:
Agents must be certified and trained under an RBI-authorised body before operating. Banks and NBFCs can only hire registered professionals.
Why it matters: It’s a shift toward ethical recovery, ensuring borrowers aren’t subject to intimidation by rogue actors.
Calls outside this window are now considered harassment and can attract regulatory penalties.
How it helps: This curbs late-night panic calls, letting borrowers maintain mental peace.
Agents cannot show up at your workplace or home unless you’ve agreed beforehand. Public embarrassment is now a violation.
Borrower rights in debt recovery now protect your privacy and social dignity.
Threats, abusive language, and insensitivity—especially during bereavement or illness—are outright banned.
The message is clear: Decency is no longer optional.
Banks must provide a dedicated officer and clearly share their contact details when sanctioning the loan. Any complaint against recovery agents must be addressed promptly.
Impact: Borrowers no longer have to suffer in silence—they can escalate with confidence.
SMSes, WhatsApp messages, and app notifications must follow the same rules. Digital intimidation is treated as equally serious.
No loopholes. Whether it’s your inbox or your doorstep, you’re protected.
Even if a third-party recovery agency is involved, the lender is held liable for any misconduct.
Accountability is key. You now know who to report, and who must fix it.
A Mumbai-based client burdened with credit card debt of ₹10,24,337 approached us for help after facing intense creditor harassment—including frequent calls and home visits while his ill parents recuperated alone. With most of his income going towards medical expenses, he began missing EMIs and had no savings, relying on family and friends to raise ₹4.5 lakhs.
Our team negotiated with all his creditors and secured an average settlement discount of 58%, bringing down his total repayment to ₹4,32,000—saving him ₹5,92,337.
Breakdown of Settlements Negotiated:
All settlements were thoroughly vetted by our in-house advocates to ensure the letters clearly stated “Full and Final” or “Closed.” We also confirmed that harassment would cease before advising the client to make payments.
Thanks to our legal and negotiation support, the client is now completely debt free, with his dignity, mental peace, and family’s well-being restored.
These rules only work if you know how to leverage them. Here’s what every borrower should do:
Save texts, record calls, and take screenshots. If a recovery agent breaks protocol, you need proof.
Recovery agents prey on fear and silence. If you engage professionally—and even better, through a legal and professional platform like Settle My Loan—you take back control.
Reach out to the grievance officer of your bank. If unresolved, escalate to the RBI Ombudsman.
Rather than default or delay endlessly, negotiate a One-Time Settlement (OTS) or Term Settlement. If handled by experts, these can clear your dues without harming your credit score.
At Settle My Loan (SML), we understand that reading regulations is one thing—but applying them in a real debt crisis is another.
That’s why our experts:
We’ve helped thousands in India reclaim peace, dignity, and financial freedom—one negotiation at a time.
While borrowers must know their rights, lenders and agents also have responsibilities:
For institutions, non-compliance isn’t just unethical—it can now attract regulatory action.
The shift is clear. These loan recovery regulations by RBI don’t stop recovery—they make it humane.
They signal that debt recovery must balance:
And that’s exactly where Settle My Loan excels—bridging this gap through expert negotiation, legal protection, and debt management under RBI guidelines.
The RBI Guidelines for Loan Recovery 2025 are more than legal jargon—they’re a lifeline. They transform borrowing from a power imbalance to a regulated system of respect.
So don’t suffer in silence. Document everything, assert your rights, and if needed, let a legal expert guide your next move.
According to the 2025 RBI guidelines, recovery agents are only allowed to contact you between 8 AM and 7 PM. Calls, messages, or visits outside of this time frame are strictly prohibited and considered harassment.
No. The updated rules state that agents cannot visit your home or workplace without your prior consent. This is to protect your privacy and prevent public embarrassment.
Your first step should be to document everything. Save all messages, record calls if possible, and note down the details of the interaction. Then, file a complaint with the dedicated grievance redressal officer of the bank or NBFC that gave you the loan.
The lender (the bank or NBFC) is held fully responsible for any misconduct by the recovery agents they hire. Even if it’s a third-party agency, the accountability lies with the original lender.
We can negotiate your settlement so that you become debt free, in most cases without it affecting your credit score.