Banking · Loan Recovery & Fair Practices Code
When a bank seeks to repossess a vehicle financed through an auto loan due to NPA default, what procedure must it follow under RBI's Fair Practices Code and Debt Collection guidelines?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Physical repossession can only be conducted by a court-appointed bailiff.
- 2Vehicle repossession can be carried out arbitrarily without regulatory compliance.
- 3The bank must issue formal repossession notice, engage trained certified recovery agents, and strictly avoid force or harassment.✓
- 4The bank can repossess the vehicle at night without prior notice.
Correct answer
The bank must issue formal repossession notice, engage trained certified recovery agents, and strictly avoid force or harassment.
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