To safeguard against risks, RBI also proposed that NBFCs should not outsource core management and decision-making functions, including internal audit and KYC compliance.
Financial institutions, including NBFCs are increasingly outsourcing some of their operations as a means to access specialist expertise, not available internally, and to reduce operational costs.
RBI has released the draft guidelines on 'Managing Risks and Code of Conduct in Outsourcing of Financial Services by NBFCs and sought comments by May 8.
"The NBFC and their agents should not resort to intimidation or harassment of any kind either verbal or physical against any person in their debt collection efforts, including acts intended to humiliate publicly or intrude the privacy of the debtors' family members, referees and friends, making threatening and anonymous calls or making false and misleading representations," the draft said.
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Further, NBFCs should not outsource core management functions including internal audit, compliance function and decision-making functions like determining compliance with KYC norms for opening deposit accounts.
An NBFC intending to outsource any of its financial activities should put in place a comprehensive outsourcing policy, approved by its Board, the draft added.
The proposal said the outsourcing of any activity by NBFC does not diminish its obligations, and those of its Board and senior management, who have the ultimate responsibility for the outsourced activity.
NBFCs, it added should retain ultimate control of the outsourced activity and outsourcing arrangements should not affect the rights of a customer.
While outsourcing the NBFCs should evaluate and guard against "strategic risks", "reputation risks", "compliance risk", "operational risk" and "legal risk", among others.
The final guidelines will be issued after taking into consideration the feedback, comments and suggestions on the draft guidelines.