Module: | KYC, NPAs, Advances & Investment Valuations
Q180: Consider the following statements regarding the empanelment, certification, and transparency protocols for recovery agents under the RBI Second Amendment Directions 2026:
1. Regulated Entities must ensure all debt recovery agents hold a mandatory IIBF certification, granting a strict 1-year grace period from the issuance date for existing uncertified agents to obtain it.
2. An up-to-date list of empanelled recovery agents, explicitly detailing the names of individuals and their respective engagement periods, must be prominently displayed on all Regulated Entity customer interface channels.
3. If a Regulated Entity changes the assigned recovery agent during an ongoing recovery process, it is only required to update its internal database and is exempt from notifying the borrower to avoid operational delays.
4. Regulated Entities are required to promptly intimate the termination of any recovery agent to the borrower to prevent any unauthorized future interaction.
Which of the statements given above is/are correct?
2. An up-to-date list of empanelled recovery agents, explicitly detailing the names of individuals and their respective engagement periods, must be prominently displayed on all Regulated Entity customer interface channels.
3. If a Regulated Entity changes the assigned recovery agent during an ongoing recovery process, it is only required to update its internal database and is exempt from notifying the borrower to avoid operational delays.
4. Regulated Entities are required to promptly intimate the termination of any recovery agent to the borrower to prevent any unauthorized future interaction.
Which of the statements given above is/are correct?
✅ Correct Answer: A
The correct answer is A. Statements 1, 2, and 4 are legally correct based on the RBI's 2026 directives.
The RBI mandates IIBF certification for all recovery agents with a strict 1-year transition window for existing uncertified staff.
It also enforces transparency by requiring Regulated Entities (REs) to prominently display the details and engagement periods of empanelled agents.
Furthermore, to prevent unauthorized harassment, REs must promptly notify borrowers if an agent's contract is terminated.
Statement 3 is incorrect because the RBI specifically mandates that REs must immediately notify the borrower of any change in the assigned recovery agent during an ongoing recovery process.
There is no exemption for updating only the internal database, making the notification requirement absolute.
The RBI mandates IIBF certification for all recovery agents with a strict 1-year transition window for existing uncertified staff.
It also enforces transparency by requiring Regulated Entities (REs) to prominently display the details and engagement periods of empanelled agents.
Furthermore, to prevent unauthorized harassment, REs must promptly notify borrowers if an agent's contract is terminated.
Statement 3 is incorrect because the RBI specifically mandates that REs must immediately notify the borrower of any change in the assigned recovery agent during an ongoing recovery process.
There is no exemption for updating only the internal database, making the notification requirement absolute.