Every year, millions of Indians who have taken loans from banks or Non-Banking Financial Companies (NBFCs) face a reality that nobody warns them about: when repayments are delayed, some lenders unleash recovery agents who use fear, humiliation, and relentless pressure as their primary tools. This is not just unpleasant. In many cases, it is illegal.

This article breaks down the full picture — what wrongful loan recovery looks like, what the Reserve Bank of India (RBI) says about it, how specific institutions like Aditya Birla, RBL, Credit Saison, NeoGrowth, FIBE fit into the broader NBFC landscape, and most critically, what you can do if you or someone you know is being targeted right now.

———  ◆  ———

What Is Wrongful Loan Recovery? Recognising the Warning Signs

Loan recovery becomes wrongful when agents step outside the boundaries set by law and the RBI’s Fair Practices Code. The line between a legitimate follow-up call and harassment is not always obvious to borrowers, which is exactly why lenders exploit it.

Here are the most common abusive recovery tactics reported across India:

• Non-stop phone harassment: Calls at midnight, calls to your relatives, calls to your employer — often aggressive, abusive, and designed to maximise psychological pressure.
• Public shaming and defamation: Threatening to tell your neighbours, colleagues, or social circle about your debt. Some agents go further and actually do it.
• Threats disguised as legal warnings: Fake arrest threats, forged court notices, or exaggerated claims about criminal liability designed to terrify borrowers into immediate payment.
• Unannounced home and workplace visits: Recovery agents arriving at your home or office without notice, sometimes recording video or taking photographs to intimidate.
• Illegal asset seizure pressure: Forcing borrowers to hand over personal property, sign documents under duress, or agree to inflated repayment terms.
• Targeting family members: Harassing spouses, parents, or children who have no legal obligation connected to the loan whatsoever.

“The RBI has been clear: recovery agents must conduct themselves with dignity, must not use intimidation or threats, and cannot contact borrowers outside of reasonable hours. Any violation is actionable.” — RBI Guidelines on Fair Practices Code

The Human Cost: When Harassment Becomes a Matter of Life and Death

This is not a subject that can be reduced to policy language. There are documented cases in India where individuals — unable to withstand the sustained psychological assault of daily harassment, public shaming, and threats — have taken their own lives. These are not isolated incidents. They are the predictable outcome of a system that treats borrowers in financial difficulty as targets rather than human beings.

The mental health consequences of loan recovery harassment include severe anxiety and panic disorders, clinical depression, social withdrawal and isolation, breakdown of family relationships, and post-traumatic stress. Vulnerable family members, including elderly parents and children, are often equally exposed to the abuse — multiplying the damage far beyond the individual borrower.

Understanding the human cost is not just important for empathy. It is also important for legal action: courts in India have awarded significant damages to plaintiffs who have proven psychological harm from institutional harassment.

⚠  If You Are in Crisis Right NowIf you or someone you know is experiencing suicidal thoughts as a result of debt harassment, please reach out immediately.iCall (India): 9152987821 Vandrevala Foundation Helpline: 1860-2662-345 (24×7) NIMHANS: 080-46110007 You are not alone, and there are people who can help.

What the RBI Says: Rules That Every Bank and NBFC Must Follow

The Reserve Bank of India has issued comprehensive guidelines under the Fair Practices Code that govern how all regulated lenders — banks and NBFCs alike — must conduct loan recovery. These are not optional suggestions. They are binding rules.

Under RBI guidelines, lenders and their recovery agents are legally required to:

• Contact borrowers only during acceptable hours: Typically 7 AM to 7 PM, unless the borrower has agreed otherwise in writing.
• Communicate respectfully and without threats: No abusive language, no false legal threats, no intimidation of any kind.
• Never contact third parties unnecessarily: Family members, friends, or employers cannot be harassed in an attempt to pressurise the borrower.
• Provide written notice before visiting: Any in-person contact must be announced in advance and conducted professionally.
• Maintain a functional grievance redressal system: Borrowers must have a clear, accessible channel to raise complaints and receive a timely response.
• Ensure agents are trained and identifiable: Lenders are responsible for the conduct of their recovery agents and cannot disclaim liability for third-party misconduct.

Key fact for borrowers: Under RBI rules, the lender — not just the recovery agent — is accountable for any harassment. If an outsourced agent crosses the line, the bank or NBFC is legally responsible.

The NBFC Problem: When ‘Ethical Policies’ Don’t Match Ground Reality

India’s NBFC sector has expanded rapidly over the past decade, with digital lenders and micro-finance institutions extending credit to millions of previously unbanked individuals and small businesses. This financial inclusion mission is genuinely important. However, the aggressive growth of some NBFCs has not always been matched by equally aggressive compliance and borrower protection.

The structural problem is this: many NBFCs outsource their recovery operations to third-party agents or agencies. These agents are often paid on commission, creating a perverse incentive to use whatever tactics produce the fastest payment, regardless of legality or decency. Meanwhile, the NBFC publishes a glossy Fair Practices Code on its website and claims no direct responsibility for its agents’ conduct.

This gap between policy and practice is where borrowers fall through.

NeoGrowth and the NBFC Accountability Question

NeoGrowth is a well-known NBFC focused on lending to Micro, Small, and Medium Enterprises (MSMEs). It publicly advertises adherence to the RBI’s Fair Practices Code and promotes a narrative of ethical, empowering financial inclusion. Its public-facing materials frequently highlight positive borrower outcomes and responsible lending.

However, NeoGrowth operates within an NBFC industry that has, as a whole, attracted serious criticism from consumer protection advocates, legal experts, and regulators for inadequate oversight of recovery practices. Industry-wide watchdog reports have consistently highlighted that even NBFCs with strong ethics policies on paper can fail to adequately monitor or control third-party recovery agents in the field.

The question is not whether NeoGrowth’s published policy is ethical. The question is whether that policy is consistently implemented in every recovery interaction, in every state, by every agent acting in its name. Borrowers who have faced harassment deserve answers to that question — and so do regulators.

Important note: This article does not assert that NeoGrowth specifically is responsible for harassment. It raises the broader and legitimate question of institutional accountability that applies to the entire NBFC sector in India.

Your Rights as a Borrower: A Practical Guide

If you are being harassed by recovery agents from any bank or NBFC, you have rights — and you have recourse. Here is what you need to know and do:

Step 1: Document Everything

From this moment forward, keep a detailed log of every contact from recovery agents. Record the date, time, name of the agent (if given), what was said, and any witnesses. Screenshot threatening messages. If calls are abusive, check your local laws on recording conversations. This documentation is the foundation of any formal complaint or legal action.

Step 2: Send a Formal Written Complaint to the Lender

Write a formal complaint to the lender’s Grievance Redressal Officer (all NBFCs and banks are required to have one). Send it by email and registered post so you have proof of delivery. State clearly what happened, when it happened, and what remedy you are seeking. The lender is legally required to respond within a reasonable timeframe.

Step 3: Escalate to the RBI Banking Ombudsman

If the lender does not respond satisfactorily within 30 days, file a complaint with the RBI Banking Ombudsman. Since 2021, the Integrated Ombudsman Scheme covers NBFCs and makes filing significantly easier. You can file online at https://cms.rbi.org.in. There is no fee involved, and the Ombudsman has the power to direct compensation.

Step 4: File a Police Complaint for Criminal Violations

Threatening language, criminal intimidation, unlawful trespass, and coercion are not just civil wrongs — they are criminal offences under the Indian Penal Code. If recovery agents have threatened you with bodily harm, used criminal intimidation, or trespassed, file a First Information Report (FIR) at your local police station. Your documentation from Step 1 will be essential here.

Step 5: Approach a Consumer Protection Forum

Consumer courts in India can award compensation for harassment, mental suffering, and deficiency in service. Cases here are generally faster and cheaper than civil court proceedings. A consumer protection lawyer can advise you on the strength of your case and guide the filing process.

Quick Reference: Key Complaint Channels in India RBI Ombudsman (online): https://cms.rbi.org.in National Consumer Helpline: 1800-11-4000 (toll-free) Consumer Forum (NCDRC): https://ncdrc.nic.in Your State Consumer Disputes Redressal Commission Local Police Station: For FIR in criminal intimidation cases

What Needs to Change: A Call for Systemic Reform

Individual complaints are important, but they treat symptoms rather than causes. The deeper solution requires structural changes at the institutional and regulatory level. Here is what consumer advocates and legal experts consistently recommend:

1. Mandatory agent certification and conduct audits — All recovery agents must be individually certified and subject to periodic third-party audits. Lenders should not be allowed to disclaim responsibility for outsourced agents.
2. Transparency in recovery operations — NBFCs and banks should be required to publicly report metrics on recovery agent complaints, disciplinary actions, and outcomes — just as they report financial performance.
3. Stronger RBI enforcement — Guidelines without teeth are merely suggestions. Regulators must impose meaningful financial penalties on institutions whose agents are found to have violated borrower rights — not just warn them.
4. Accessible and fast grievance redressal — Complaint channels must be genuinely accessible to rural, low-income, and digitally limited borrowers — not just formally available to those who can navigate online portals.
5. Mental health support for victims — Borrowers who have suffered psychological harm from recovery harassment must have access to free or subsidised counselling and mental health services, coordinated through consumer protection bodies.

Final Word: You Have More Power Than They Want You to Think

The recovery agents who show up at your door or flood your phone are counting on one thing: that you do not know your rights. The institutions they represent may be counting on the same. This article exists to close that knowledge gap.

You are protected by RBI guidelines. You have access to free complaint channels. You can seek compensation for harassment. And you are far from alone — millions of Indians are navigating the same system and learning, slowly, that borrowers have legal standing and institutional accountability is not optional.

If you found this article helpful, share it with someone who needs it. Awareness is the first and most powerful line of defence.