New Delhi: The Reserve Bank of India (RBI) has issued stricter rules for recovery agents, enhancing borrower safeguards and tightening oversight of technology-based recovery mechanisms. The comprehensive framework governing loan recovery practices by commercial banks will come into effect from January 1, 2027. The RBI has also directed banks to ensure that recovery targets and incentive structures do not encourage harsh recovery practices. The rules apply to commercial banks, excluding Small Finance Banks, Payments Banks, Regional Rural Banks and Local Area Banks, as reported by Business Today. Banks must formulate a detailed policy governing loan recovery under the new framework.