Understanding Bank Harassment: What Are Your Rights?
What is Bank Harassment?
Banks and their recovery agents must follow RBI guidelines while collecting loan payments. Harassment occurs when they use excessive calls, threats, public embarrassment, or false legal warnings. These actions violate borrower rights and can be reported.
Signs of Harassment by Banks or Recovery Agents
Some banks or agents repeatedly call borrowers at odd hours, use threatening language, or visit homes and workplaces without consent. In some cases, they inform family members or employers about unpaid loans, causing distress. False legal notices and threats of arrest are also common.
Borrower Rights Under Indian Law
Borrowers have legal protection against unfair recovery practices. Banks cannot disclose loan details to others, use force, or threaten legal action without due process. They are allowed to contact borrowers between 8 AM and 7 PM and must follow ethical recovery methods. If a bank violates these rights, borrowers can file complaints with the bank’s grievance department, the RBI Banking Ombudsman, or approach Consumer Court for relief.
How to Stop Harassment
If a bank or agent is harassing you, keep records of calls, messages, and any aggressive behavior. File a written complaint with the bank and escalate it to RBI Banking Ombudsman if needed. If harassment continues, consult a lawyer to send a legal notice or file a police complaint. In severe cases, Consumer Court can provide compensation.
Loan Settlement as an Option
If repaying the loan is difficult, loan settlement allows borrowers to negotiate with the bank to pay a reduced amount. While this can help in financial distress, it impacts the CIBIL score, making future loans harder to obtain. Borrowers should consider this option carefully before proceeding.
Final Thoughts
Bank harassment is illegal, and borrowers have the right to fair treatment. If you face unfair recovery tactics, take action immediately. For those struggling with repayments, settlement is an option, but it comes with consequences. If you need guidance, seek expert help today.
