Know Your Rights - Loan & Credit Card Customers

How often do we read news in newspapers and websites about recovery agents from banks and credit card company's harassing customers? Quite often isnt it? With the Economy in the state it is now, a large number of people are in a bad situation. They have credit card outstanding or loans for which they are unable to repay the money.

Whenever we borrow money, it is our duty to repay it as per the borrowing agreement. If we do not, the lender has the right to take steps to recover his money. This may include possession of your property or even a formal police complaint against you. However, this does not mean that the lender can do anything they want to disturb you or your family.

As customers, we have Rights. The Banking Codes and Standards Board of India (BCSBI) has laid down a code of conduct for banks, including guidelines for the recovery of dues from customers. Banks have to make sure that they adhere to these rules. These rules are laid down in the interest of all of us "The Customers"

These guidelines are:

Guideline No. 1: The Bank has to give Sufficient Notice to the Customer

This means that, the bank is supposed to inform the borrower (Loan or credit card customer) about his dues and give him sufficient notice period for the payment. A bare minimum of 7 days has to be given to the borrower to arrange for the payments. i.e., A Letter must be sent to the customer atleast 7 days before the banks initiates any recovery proceedings against them.

Guideline No. 2: No Unwanted/Untimely calls

Just because you borrowed money from a bank, doesnt mean that they can call you anytime they wish and disturb you. A customer can be contact only between 7 AM to 7 PM. Also, during this time, any calls made by the bank must be recorded/documented. Another important point here is that, if you say that you are busy and cannot talk at some time duration during the day, the bank has to honor your request as far as possible.

Guideline No. 3: No Uncivilized Behavior

This is probably the most important guideline. The Bank Representatives or Recovery Agents are supposed to maintain civil behavior at all times. They cannot yell or use abusive language at the customer or his/her family members. They must also respect the customers privacy and must refrain from embarrassing the customer in front of others.

PHYSICAL INTIMIDATION AND VIOLENCE ARE CRIMINAL OFFENCES.

The customer has to right to file a police complaint if any of the bank representatives or recovery agents indulge in physical violence during the course of the recovery process.

Guideline No. 4: Customer has the right to Choose the Place where he/she is contacted

The Customer has the right to choose the place where he/she wants the bank to contact them. For ex: some people can be uncomfortable meeting with recovery agents in their residence and ask them to come to their workplace. In such a case, the bank has to honor the customers request.

If the customer has not specified any meeting place, the bank agent can go to his residence. If he/she is not available at home, the agent can go to his workplace.

Guideline No. 5: Reg. Repossession of Property

This guideline is mostly applicable in case of home loan defaults. In the case where a home loan borrower is unable to repay his dues, the bank can take possession of the property to recover any dues. However the guidelines here are:

1. The Bank must resort to repossession of property only as the last measure
2. The Bank must give a written notice to the borrower before they do so
3. The Bank must take reasonable care to ensure the safety and security of the asset they are taking into custody
4. The Borrower has the right to regain possession of their property before the bank sells it
5. The Bank must return any excess amount if any that is left after selling the property and settling their dues, to the customer

Guideline No. 6: Reg. Authorized Recovery Agents

The bank cannot just hire any random individual and send them to collect dues from customers. The list of individuals who are authorized to recover dues from customers must be made public. They must not only put up those details in their website, they must also make this information available through their bank branches.

Most importantly, any recovery agent visiting a borrower must have a valid authorization letter from the Bank and display his Identity Card prominently.

REMEMBER: IF THE RECOVERY AGENT IS NOT WILLING TO SHOW HIS/HER ID CARD OR THE AUTHORIZATION LETTER FROM THE BANK, THEY HAVE NO RIGHT TO TALK TO YOU ABOUT THE MONEY YOU OWE THE BANK.

Guideline No. 7: Reg. Customer Complaints

The customer has the right to complain against any misbehavior by the recovery agents. If such a complaint is received, the bank must investigate the complaint thoroughly. If the bank fails to look into the complaint or if the customer is not satisfied with the banks response, the customer can take it up with the Banking Ombudsman.

If the recovery agent had indulged in physical intimidation, the customer can file a formal police complaint as outlined in Guideline No. 3.


As customers, it is our responsibility to know our rights and ensure the wellbeing and safety of our family and most importantly ourselves. So, we need to make sure that we understand these guidelines.

Know Your Rights - Banking Customer Service

The title of this article sounds ambitious, doesn't it? But, believe me, it's a fairly straight forward article…

We all have a bank account, have loans, credit cards and avail other numerous services from Banks. But, a majority of us do not know our basic rights. Every customer of a Bank has a set of rights that he is entitled to, a set of rules that banks must follow. Well, the purpose of this article is to educate all of us, the rights we have when it comes to Banking.

So, lets get started!!

A Word before we begin:

If you have the habit of reading a newspaper or browsing the internet news websites, you could have seen numerous articles like:

Bank Reprimanded for using Goons to collect loan instalment from customer

Or

Customer Receives 1.25 Crore bill on a credit card surrendered 10 years back

And so on…

All of us are prone to such shocks and surprises when it comes to the banking industry. Though we are all educated and are decent citizens of this great country, there might be unfortunate circumstances wherein we might be illtreated or underpriviledged by banks. It is our duty to know our rights and stand up to them if such an incident happens.

So, here are our rights!!!

Know Your Rights - Banking Customer Service

The Reserve Bank of India has formulated a set of rules and guidelines that banks have to follow when it comes to treating customers. All these rules are to benefit and protect the interests of the customers. They are:

Your Right No. 1: Right to know Interest Rate Applicable on Loans

If a customer has borrowed against a floating rate of interest (A floating rate loan), then he/she has to be informed about any change in rate through given means such as letter, email, SMS etc. The Interest rate change information should also be available on the Banks’ website.

This means that – they cannot just change the rate of interest on a loan that you have taken from them without informing you. If they do that, you have the right to fight against them.

Your Right No. 2: Right to Get Loan Documents Bank on Time

Bank has to return property and other documents within 15 days of closure of loan whether such demand has been made or not by the customer. If a Bank fails to return documents in the stipulated time, the customer should be adequately compensated in cash.

This means that – they have to return all forms of collateral (like property documents, fixed deposit receipts, gold etc) that they have received against a loan within 15 days of the customer (you) repaying the loan in full. If they don't, you have the right to fight against them.

Your Right No. 3: Right to Know details of a Joint Account

Banks must inform all joint holders before classifying an account as dormant/ inoperative.

This means that – they have to intimate all the joint holders of an account about the inactivity of the same before they make it dormant. Lets say you and your wife have a joint account with XYZ bank and you leave abroad and haven’t transacted for 3 months, they cannot just close the account. They have to send a letter to you as well as your wife before they do that. If they fail to do so, you have the right to fight against them.

Your Right No. 4: Right to Buy only the Services you Want

Bank can’t force customers to take insurance cover (for the securities lodged) from a particular insurance company. The customer is free to select any insurance company.

This means that – they cannot ask you to take a ULIP or any other insurance policy for giving you some service. For ex: when I visited a bank last year asking for a safety deposit locker, the customer service officer asked me to take an ULIP policy with premium of Rs. 50,000/- per year to give me the locker. Luckily I did not accept and got a locker from another bank. But the fact here is, they cannot force you into buying some kind of service in order to give you some other service. If they do that, you have the right to fight against them.

Your Right No. 5: Right to say No to Pre-Approved Services

Banks can’t pre-sanction loans to any customer based on telephonic confirmation. The Bank has to get a written consent letter from customer.

This means that – you cannot be given a loan, unless you sign a written agreement/letter. These days customer service officers call up and explain some hi-fi stuff on phone and using your “oh ok” response, sell you some insurance policy or loan. They cannot do that. They cannot provide any service unless and until you sign and ask for it. If they do such an act, you have the right to fight against them.

Your Right No. 6: Right to Close your Bank Account

In the event of account closure request, the Bank has to close the account within 3 days from receipt of the request.

This means that – they cannot delay your bank account closure sighting any funny reasons. If you want your bank account closed and are willing to pay the charges associated with it, they have no right to stop you from doing so. If they try to do so, you have the right to fight against them.

Your Right No.7: Right to get Complaints Resolved on Time

Banks have to address customer complaints in 30 days, failing which they have to compensate the customer.

This means that – If a customer has any complaint against the services rendered by a bank, they have to address it within 30 days of the receipt of the complaint. If they don't, you have the right to fight against them.

Your Right No. 8: Right to Know Recovery Agents

Banks must publish details of all recovery agents on their website so a customer can check whether an agent is authorized or not.

This means that – No stranger can visit your door step and ask for the loan money. If someone claims to be an agent of the bank, you have the right to ask them for proper credentials and also visit the banks website to see if the person is indeed a registered agent of the bank. If you cannot verify the details, you have the right to ask them to leave.

All these rules are applicable to member Banks of Banking Codes and Standards Board of India. All Banks that are operational in India are supposed to follow these rules. To view the list of all registered banks in India “Click Here”

Before we finish – you might ask me – what I mean by, you have the right to fight against them. That doesn't mean a literal fist fight. You have the right to fight against them in a court of law. Alternately you can also contact the banking ombudsman of your local region and complain against the bank with proof of the problem you faced.

All banks are supposed to display the details of the regional banking ombudsman in a prominent place in their bank branch premises. You can get those details and raise a complaint with them.

Happy Enjoying Bank Services !!!