Focus on recovery: What changes for banks and borrowers
RBI guidance on recovery requires banks to follow specified steps, use borrower-facing alerts, and keep enforcement proportionate within the RBI framework.
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What happened (RBI recovery-focused compliance guidance)
The Reserve Bank of India (RBI) guidance introduces a “focus on recovery” approach that explains practical consequences for banks and borrowers. RBI expectations emphasize specified procedural steps for banks during recovery, borrower-facing alerts, and constraints on escalation actions, with enforcement expected to be proportionate and within the RBI framework.
Background and earlier position
Banking recovery processes historically required banks to balance recovery outcomes with regulatory expectations around conduct and fair treatment. Earlier practice could differ across banks in how consistently procedures were followed before escalation and how clearly borrowers were informed through structured communication.
