Sun Dec 28 14:53:59 UTC 2025: Here’s a summary of the text:

A growing number of Indian borrowers are facing harassment from bank recovery agents after defaulting on loans, often due to job loss, high debt burden, or medical emergencies. A survey by Expert Panel reveals that many borrowers face abusive calls, repeated contact from multiple lenders, and even home visits and threats. The RBI has guidelines against such practices, but they are often ignored. Tamil Nadu has criminalized coercive recovery. Experts advocate for alternative dispute resolution methods like negotiation to resolve these issues.

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Loan Recovery Harassment on the Rise in India, Survey Reveals

New Delhi – December 28, 2025 – A disturbing trend is emerging in India’s credit market: widespread harassment of borrowers by bank recovery agents. A new survey by Expert Panel, a debt counseling firm, reveals that a significant portion of borrowers who default on loans are subjected to abusive recovery tactics, including threatening phone calls, home visits, and intimidation.

The survey found that nearly 40% of borrowers experienced abusive calls, while over a quarter received repeated calls from multiple lenders. A concerning 11% reported visits to their homes or workplaces by recovery agents.

According to Expert Panel, the primary drivers of loan defaults are job loss, high EMI burdens, multiple loans, and medical emergencies. Anurag Mehra, Director of Expert Panel, emphasized that defaulting on a loan is not a crime, but a commercial agreement gone awry. He noted that while the Reserve Bank of India (RBI) has established guidelines against harassment, these are frequently disregarded.

The RBI’s Integrated Ombudsman Scheme report for FY 2024-25 shows a high volume of complaints against banks, with “Loans and Advances” being the most common grievance.

While the Supreme Court has previously condemned the use of “musclemen” for loan recovery, and the RBI has clear guidelines against harassment, the problem persists. Tamil Nadu has taken a pioneering step by criminalizing coercive recovery practices, with offenders facing imprisonment and fines.

Experts are calling for increased awareness of alternative dispute resolution methods, such as negotiation and mediation, to resolve loan disputes without resorting to litigation. Expert Panel reports a 99% success rate in settling cases through these methods.

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