RBI fines RBL Bank for non-compliance with rules on loan recovery agents

The Reserve Bank of India (RBI) said on Monday it fined private lender RBL Bank Ltd 22.7 million rupees ($274,915) for not complying with certain directives on loan recovery agents.

The RBI noticed "deficiencies in regulatory compliance" after it examined complaints received against the Mumbai-based lender's recovery agents during the financial years 2018-19 to 2021-22, the central bank said in a statement.

The RBI said RBL failed to ensure that the loan recovery agents it engaged during those periods did not resort to intimidation or harassment and that it did not ensure police verification of the agents before employing them.

RBL did not immediately respond to a Reuters' request for comment.

Last year, the RBI issued a circular advising the financial institutions it regulated to "strictly ensure that they or their agents did not resort to intimidation or harassment of any kind", and that any violation would be "viewed seriously".