In this post, we will discuss the latest code of conduct applicable on the Debt recovery agents employed by various banks.

As the DRA Examinations are scheduled for October, November & December 2022, its no denying that candidates preparing for DRA/ DRA Telecallers exams of IIBF are supposedly looking for notes cover up the prescribed Debt recovery agents Syllabus in the limited time. As the Code of conduct is an important part of the Syllabus of DRA Examinations 2022, we are hereby, discussing the same for your convenience. 

There are other free notes & free DRA 2022 YouTube Lectures on our website & YT Channel for the latest DRA 2022 Exams! You can access the same from here.


So, let us begin the topic by asking the question: 


Well….in the recent years, there has been an increase in the number of lawsuits against banks and there was an adverse publicity due to the involvement of debt collection agents

It was after recognizing the likely implications for reputational risk not only for the bank concerned but also for the banking sector as a whole – necessitated a review of the policy, practice and procedures associated with engagement of debt collection agents by Indian banks. In this connection, the Reserve Bank proposes to issue the following operational guidelines to be adopted by all commercial banks which are to be followed by: 

Agent/s: They would also include agencies engaged by the Bank and their agents/employees as well as the Bank’s own employees.

The reason for increased lawsuits & reputations risk was: Methods followed by Recovery Agents

Some banks did set very strict recovery targets or offered high incentives to recovery entities which subsequently prompted enforcement agents to use intimidating and dubious methods for collection of fees. 

So, in pursuance of the guidelines, banks have been advised that in the matter of loan recovery:

  • lenders should not resort to undue harassment i.e. constant harassment of borrowers at odd hours, use of muscle power to recover loans etc. 
  • banks should ensure that they authorized debt collection agents have refrained from taking action that could damage the integrity and reputation of the bank 
  • their agents should not resort to intimidation or harassment of any kind, whether verbal or physical, against any person in their debt collection efforts, including acts intended to publicly humiliate or violate the privacy of debtors/credit cardholder family members, referees and friends, threatening and anonymous calls or false and misleading statements.
  • Their agents are also to follow “Code of Bank Obligations to Customers” (BCSBI Code) under which banks are required to strictly adhere to codes relating to collection of charges.


Now that we have taken the overview of code of ethics, lets us talk about the code itself:

Applicability of Code of Conduct:

The Model Code of Conduct for Debt Recovery Agents (RAs) will apply to all RAs appointed by the Bank. This is how:

  • PART OF AGREEMENT: The Code of Conduct will form part of the agreement between the Bank and the Debt Collection Agents. 
  • COMPLIANCE: The RA must agree to comply with this Code before conducting any recovery operation on behalf of the Bank. 
  • BLACKLIST: Any RA found in violation of this Code may be blacklisted and such action taken will be communicated by the Branches/Operating Units to the concerned Business Group. 
  • MONTHLY REPOSTING: The business group will send this information monthly to IBA for circulation to member banks for action at their end.


So, when and where RAs can contact a person by phone (as per the code of conduct?

(1) Telephone contact may normally be limited to the time between 08:00 AM and 06:00 PM unless the special circumstances of the borrower’s business or profession require otherwise. However, it has to be ensured that the borrower is only contacted if the call is not expected to be a nuisance. 

Calls earlier or later than the prescribed time can only be made under the following conditions:

  • If the borrower has given written or oral permission to do so.
  • The borrower has been duly notified by the Bank of recalling the loan and has been notified of the appointment of a recovery agent and the borrower is deliberately evading RA summons.
  • The time and number of calls and the content of the conversation will be documented.

(2) The Borrower shall ordinarily be contacted at a place of their choice and, in the absence of any particular place, shall be contacted at their place of residence or at their place of employment/business, as the case may be.

(3) In appropriate cases like bereavement in the family or similar other catastrophic occasions, calls/visits should not be made for collection of charges.

Confidentiality is important too!

So, the question is: Can the borrower’s loan arrangement be discussed with someone?

Under normal circumstances, RAs should maintain confidentiality about the borrower. However, the matter may be discussed with his family members if the borrower’s response to the withdrawal notice and RA’s repeated appeals to the borrowers do not elicit any response

Family for this purpose shall be:  Immediate and adult family members only and shall include: 

  • husband, 
  • son & unmarried daughter (including legally adopted), 
  • unmarried sister, 
  • father, 
  • mother, 
  • daughter-in-law, 
  • grandson and 
  • granddaughter. .


How to contact?

Messaging and contacting persons other than the debtor

  1. You need to call the borrower. 
  2. If the borrower is not available, a message should be left for the borrower to call back or check if it is a good time to call again. 

A message should be left with his business associate or person(s) representing him at the bank stating that: 

“(RA name) representing (Name of bank) called and asked to be called back at (given phone number). The purpose of the call is to collect the bank’s claims.”


Code of conduct During Call

  • INTRODUCE: The RA proves itself to the borrower and informs him of the authorization to represent.
  • State the REASON for the call.
  • Provide the borrower with all information about the fees and give them the necessary notice so that the fees can be paid.
  • Offer to call back if the borrower is busy.
  • Speak in the language that is most comfortable for the borrower.
  • Business only: Keep the conversation limited to business.
  • Reconfirm next call or next visit.
  • Provide contact numbers (for both the RA and the bank).
  • Adequate notice will be given before taking over the security and before its realization.
  • All assistance will be provided to resolve disputes or differences in a mutually acceptable and customary manner, if any, with respect to Fees.
  • AVOID i.e. Behavior that suggests criminal intimidation or threats of violence would be scrupulously avoided.


Gifts or bribes!

Its required that a RA will not accept any kind of gift or bribe


Others points in conduct:

  • RAs will not accept cash and the collection will be deposited directly into the bank.
  • RAs must be dressed appropriately, decorum and decorum will be maintained.
  • RAs will provide the pledge located in the attachment.
  • RAs would only use activities permitted by law in the course of enforcement.


So, this is all about the basics of the code of conduct required from the Debt Recovery agents, especially the tele-callers! 



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