The Reserve Bank of India has scaled back certain DRM measures on smartphones and gadgets in its loan recovery framework, introducing phased restrictions and enhanced privacy safeguards following industry objections.
The Reserve Bank of India has softened parts of its planned rules on loan recovery while keeping core protections for borrowers, after industry objections to an earlier draft that would have given lenders broader power to disable EMI-financed gadgets. In the final version, the central bank said lenders may impose gradual restrictions on phones, tablets and laptops bought on credit, but only after a loan is at least 30 days overdue and a formal notice has been issued.
Under the revised framework, lenders may apply graded limits between 30 and 60 days past due, although outgoing calls must remain available during that window. Full contractual restrictions can apply only once the account is more than 60 days overdue. Business Standard reported that the earlier proposal had set a stricter threshold before any action could begin. The new rules still prohibit blocking incoming calls, SMS messages and emergency SOS functions at any stage, and lenders must ensure the restrictions do not stop a borrower from working.
The Reserve Bank has also tightened privacy safeguards. Lenders and their service providers must obtain certification for locking software from the device maker or operating system platform, and they are barred from accessing personal data such as contacts, call logs, photographs, location history or text messages. Devices must be unlocked within one hour of payment being received, and borrowers are to be compensated at ₹250 an hour for delays, subject to a cap equal to the loan amount disbursed.
On recovery agents, the central bank has stepped back from its plan to require banks to publish detailed public information on individual staff, after lenders raised concerns about high turnover and the administrative burden of keeping those records current. The revised rules still require certification for newly covered recovery agents, but RBI has deferred the implementation date to January 1, 2027 from October 1, 2026 and allowed a one-year transition period. Mint reported that the wider recovery framework is intended to curb harassment, abusive language and excessive calls, while keeping contact with borrowers within set limits and barring pressure on family members, colleagues and neighbours unless they are guarantors.
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