Trai's exclusive numbering mandate raises concern on debt collection

TRAI's 1600-number mandate to curb fraud may raise lenders' collection costs and push NBFCs and banks back towards field-based debt recovery

The Telecom Regulatory Authority of India (Trai) directive requiring banks and non-banking financial companies to shift to the ‘1600’ numbering series for voice calls to curb spam and fraud is raising concern among lending players.

 

A dedicated number series is likely to deter low-intent borrowers from engaging in calls, pushing lenders towards higher-intensity collection strategies such as expanded deployment of on-ground staff, greater use of official alternate channels such as WhatsApp, and a sharper focus on borrower education to keep delinquencies in check.

 

While the intent is consumer protection, the mandate could disrupt digital debt recovery channels, sources said.

 

People with knowledge of the matter said the cost for a lender may rise between 10 and 15 per cent, depending on the stage of collection or delinquency of a particular borrower.

 

Additionally, this will also mean greater deployment of field agents, as lenders would prefer physical channels to reach out to borrowers.

 

“The reliance on the field network is going to significantly increase when 1600 rolls out completely. While the 1600 series is a very good thing because it is going to cut down a lot of the financial fraud that is happening today, there could be a challenge from a collections perspective since there have been advancements in digital to reduce physical points,” said Ananth Shroff, founder and chief executive officer, DPDZero, a debt collections fintech firm.

 

The extent of quantifiable impact is yet to be seen since the deadline for compliance with TRAI’s mandate for commercial banks was January 1, whereas for large and other NBFCs it is February 1 and March 1, respectively.

 

To be sure, TRAI’s direction comes with a view to “enable citizens to reliably identify legitimate calls originating from regulated financial institutions” at a time when frauds are draining bank accounts.

 

TRAI’s move comes at a time when the value of bank frauds has gone up, according to Reserve Bank of India (RBI) data.

 

The amount involved in banking system frauds surged to around ₹21,515 crore in the first half of FY26 (H1FY26), up 30 per cent from the same period last year, even as the number of frauds fell 2.8 times to 5,092.

 

In comparison, the amount involved in banking system frauds stood at around ₹16,569 crore in H1FY25, while the number of cases was higher at 18,386. For the full FY25, frauds amounted to around ₹34,771 crore and the number of cases stood at 23,879.

 

Companies and lenders may still be going through the fine print to understand whether the mandate is applicable to collections, considering it may not necessarily qualify as part of a transaction.

 

“People are not picking up calls where bots are using the 1600 numbering series. There will be dependence on offline activities, like going back to the traditional model of ground collection, because you are not able to establish a connect using a tele call,” said Rishabh Goel, co-founder and chief executive officer, Credgenics, a debt collections firm.

 

At the same time, companies are doubling down on analytics to make collections more efficient earlier in the credit cycle.

 

“There is focus on predictive analysis. There is intelligence in identifying the kind of borrowers in the overall pool and understanding the persona of the borrower. This is followed by intelligence on how to engage with the borrower,” Shroff of DPDZero said.

 

Goel of Credgenics explained that the company continued to follow both means of collections, including physical and digital, with a focus on the latter.

 

The company has partnered with payments firms such as PhonePe, on the back of their larger customer base, to reach out to borrowers with reminders for repayments.

 

“A lot of engagement happens through WhatsApp, with a large chunk of the population present there. Using that channel effectively, with regional content so that people are able to read and resonate well, along with other methods such as educational content and performance marketing, is also being implemented,” Goel explained. 

Ringing in change

o Banks and NBFCs directed to shift calls to ‘1600’ numbering series to curb spam, fraud

o Lenders expect lower borrower response, which can affect digital collections

o Greater reliance on field agents and alternative channels is likely

o Collection costs may rise by 10-15% based on delinquency stage