FM Sitharaman: NBFCs Must Ensure Fair and Respectful Loan Recovery Practices

Finance Minister Nirmala Sitharaman has urged NBFCs to adopt fair recovery practices and partner with banks to improve priority sector lending.

- TBG NETWORK

Union Finance Minister Nirmala Sitharaman emphasized that the loan recovery practices of Non-Banking Financial Companies (NBFCs) must be fair, respectful, and empathetic, and must strictly align with the Reserve Bank of India's (RBI) Fair Practices Code.

Speaking at the NBFC Symposium 2025 held in New Delhi on Wednesday, the minister urged NBFCs to avoid harsh recovery measures, especially in cases involving small loan amounts, and reminded them of the importance of customer dignity.

Recovery practices of NBFCs must be fair, empathetic and respectful, in strict accordance with the RBI's Fair Practices Code," Sitharaman said.

She noted that sometimes media reports highlight harsh recovery actions taken for very small loan amounts like Rs 500.

Sensationalized reporting in the media, which they are right in reporting. I don't fault the media at all on this. Where harsh measures are taken for recovery of a 500 rupee, heartbreaking stories come out," she said.