new delhi the government has instructed public and private sector banks to pursue loan recovery cases with sensitivity and not resort to harsh steps finance minister nirmala sitharaman said on mondayi have heard complaints about how mercilessly loan repayments have been followed up by some banks the government has instructed all banks both public and private that harsh steps should not be taken when it comes to the process of loan repayments and they should approach the matter with humanity and sensitivity in mind she said in an intervention during the question hour in lok sabhathe rbi has also taken strong exception to harsh recovery methods being used by recovery agents of banks and has warned of strict actionin august last year the central bank had also tightened guidelines to be followed by loan recovery agents acting on behalf of lenders the guidelines bar recovery agents from engaging in public humiliation of borrowers or calling them before 8 am or after 7 pmthere have been several cases of harassment of retail borrowers and use of strong arm tactics by loan recovery agents prompting the authorities to takestrict action to prevent such apracticeearlier junior fm bhagwat karad said citing rbi data that while retail loans grew at a compounded annual growth rate of 19 from march 2021 to march 2023 the nonperforming assets declined from 2 2 to 1 5 during the same perioddespite an increase in policy repo rates by 250 basispoints since may 2022 share of retail borrowers having missed payment due date by 090 days declined to 8 in march 2023 from 9 in june 2022 with increased retail loan demand and declining retail stressed assets theoverall portfolio is placed comfortably karad said in a written reply in lok sabhahe said to identify and monitor stress in loan accounts including that of retail borrowers public sector banks are taking a number of steps including deployment of early warning signals and enhanced monitoring of portfolios where build up of stress is observed