What to Do if Your Bank is Harassing You Over a Debt
What is Bank Harassment?
Banks and their recovery agents must follow RBI guidelines while collecting loan payments. If they use excessive calls, threats, or public embarrassment, it is considered harassment. Borrowers facing such issues have legal rights and can take action.
Common Signs of Bank Harassment
- Repeated calls at odd hours
- Threatening language or intimidation
- Visiting home or workplace without consent
- Informing family or employer about the debt
- Sending false legal notices or threats of arrest
Your Legal Rights as a Borrower
Borrowers in India have legal protection against unfair recovery practices. Banks cannot use force, threaten legal action without due process, or disclose loan details to third parties. RBI guidelines allow recovery calls only between 8 AM and 7 PM. If these rules are violated, borrowers can file complaints and seek legal help.
Steps to Stop Harassment
- Keep Records – Save call logs, messages, and any evidence of misconduct.
- File a Complaint with the Bank – Submit a written complaint to the bank’s grievance department.
- Report to RBI Banking Ombudsman – If the bank does not resolve the issue, escalate the complaint to RBI.
- Send a Legal Notice – Consult a lawyer and formally warn the bank or recovery agency.
- Approach the Consumer Court – If harassment continues, file a complaint and seek compensation.
Loan Settlement as an Alternative
If repaying the loan is difficult, borrowers can negotiate a settlement with the bank. This involves paying a reduced amount to close the debt. However, it impacts the CIBIL score, affecting future loan approvals. Borrowers should weigh the pros and cons before opting for settlement.
Final Thoughts
Bank harassment is illegal, and borrowers do not have to tolerate unfair recovery tactics. Knowing your rights and taking the right steps can help stop harassment. If you need help handling loan disputes, seek expert advice today.
