Are bank recovery agents harassing you for an NPA loan? Don’t worry – you have legal rights. In this 2025 guide, we'll walk you through how to legally stop recovery agents, understand your rights, and find solutions for your non-performing asset (NPA) loan. Whether you're a business owner, entrepreneur, or individual borrower, this blog is your legal shield.

What Is An NPA (Non-Performing Asset) Loan?

When a borrower fails to pay the loan EMI for more than 90 days, the loan is classified as an NPA by banks and financial institutions. Once an account turns NPA, banks may initiate recovery through the SARFAESI Act, recovery agents, or legal notices.

Why Are Recovery Agents Calling You?

Banks hire recovery agents to collect dues after your loan becomes an NPA. They may call, visit your home, or send notices. However, many of their tactics may be illegal or unethical.

What are your legal rights against recovery agents?

Right to privacy

Recovery agents cannot call you at odd hours (before 8 AM or after 7 PM). They cannot visit your workplace without permission. You can file a complaint for mental harassment or breach of privacy.

Right to be treated with dignity

Agents must follow the RBI’s Code of Conduct. They cannot threaten, abuse, or humiliate you or your family members.

Right to written communication

Any recovery must be preceded by a written notice from the bank. Ask for official ID and documents before entertaining any agent.

Right to file a complaint

File a complaint with the Bank’s grievance redressal cell.

Banking Ombudsman, Police (if harassment or threats are involved)

How to legally stop recovery agents

Send a Legal Notice

Hire a lawyer to send a legal notice to the bank and the recovery agency. Demanding that harassment stop immediately.

File a Police Complaint

If recovery agents abuse, threaten, or physically confront you, you can register an FIR at your local police station.

Approach The Banking Ombudsman

The RBI-appointed ombudsman handles such grievances. File a complaint online at the RBI CMS portal

Take Legal Action in Civil Court

You can file for an injunction or damages in civil court for harassment or illegal recovery attempts.

What are your options for securing an NPA loan?

Even if your account is NPA, you still have options:

One-time settlement (OTS)

Negotiate with the bank to pay a lump sum amount lower than your total dues. Helps you close the loan and remove NPA status

Restructuring the loan

Apply for restructuring under the RBI guidelines. Banks may extend tenure or reduce interest for easier repayment.

Debt Resolution with Experts

Reach out to professional advisors like Bank Samadhan, who negotiate directly with banks and help stop legal proceedings.

What recovery agents cannot do (illegal actions)

Illegal Action By The Recovery Agent

Threatening or using violence, Public humiliation, seizing property without a court order, Harassing family or neighbours

Legal Consequence

Police FIR + Jail, Defamation lawsuit, Criminal trespass, mental harassment complaint

Pro Tips to Handle Bank Recovery Agents

Never sign documents without reading them. Record conversations (audio/video) if possible. Do not panic or lose your temper—stay calm and document everything. Take professional help early to avoid escalation.

Need help with NPA loan recovery?

Bank Samadhan is India's trusted NPA settlement advisor. We help borrowers

Legally stop harassment from banks

Settle NPAs under RBI guidelines

Protect your business and assets from seizure

Contact us for a free consultation at www.banksamadhan.in or call us today!

Conclusion: You have rights- use them!.

📌 Frequently Asked Questions (FAQs)

Q1. What is an NPA loan?
An NPA (Non-Performing Asset) loan is when you fail to pay EMIs for 90 days or more.

Q2. Can recovery agents come to my house?
Yes, but only during official hours and with proper identification. They cannot force entry or create a public scene.

Q3. Can banks send recovery agents without notice?
No. Banks must issue a written notice before initiating any recovery action.

Q4. Can I go to jail for non-payment on an NPA loan?
No. Loan default is a civil matter, not a criminal offense. You cannot be jailed for inability to pay.

Q5. What is the SARFAESI Act?
It allows banks to seize secured collateral without court intervention. However, you can appeal the action in the Debt Recovery Tribunal (DRT).

Q6. How do I stop calls from recovery agents?
Send a legal notice, file a complaint with the bank, and raise the issue with the RBI Ombudsman.

Q7. What are my rights if recovery agents visit me?
You have the right to be treated respectfully, to ask for their ID, and to not be harassed.

Q8. Can recovery agents threaten me?
No. Any form of threat or harassment is illegal. You can file a police complaint.

Q9. Where can I complain about recovery agents?
You can complain to the police, the RBI Ombudsman, or the Consumer Forum.

Q10. Can I settle my NPA without recovery agents?
Yes. You can directly approach the bank for a One-Time Settlement (OTS).

Q11. How can Bank Samadhan help?
Bank Samadhan helps you legally stop harassment, negotiate with banks, and settle your loan peacefully.