The Reserve Bank of India has revised its guidelines on restricting financed devices following loan defaults, extending the timeline and easing the disclosure norms for recovery agents, while safeguarding borrower rights and privacy.
The Reserve Bank of India has softened its plan to let lenders curb access to financed devices after missed EMI payments, giving borrowers more time before restrictions can begin while also easing the disclosure burden on recovery agents. According to the Economic Times, the central bank’s final rules allow only gradual limits on mobile phones, tablets and laptops bought on instalments, and the changes come after feedback from lenders and recovery firms.
Under the revised framework, no device can be restricted until a loan is at least 30 days overdue and the borrower has received formal notice. Between 30 and 60 days past due, lenders may apply stepped-up limits, but outgoing calls must remain available. Full restrictions allowed under the loan contract can be imposed only after the debt is more than 60 days overdue, a notable shift from the earlier proposal that would have delayed such action until 90 days past due, as reported by the Economic Times and other Indian business publications.
The RBI has still kept borrower safeguards in place. Lenders cannot block incoming calls, SMS messages or emergency SOS features, and the restrictions must not prevent use of the device for work-related purposes. The rules also require certification from the device maker or operating system platform where available, and prohibit access to private data such as contacts, photographs, call logs, messages and location history. Once a borrower clears the dues, the device must be restored within an hour. If the lender causes a wrongful restriction or delays reinstatement, compensation of ₹250 an hour will apply, capped at the amount originally disbursed.
The central bank also relaxed the rules for recovery agents. Instead of naming every individual agent on a website, banks and other covered lenders now need only publish an updated list of the recovery agencies they have engaged. Industry concerns about high staff turnover and the difficulty of maintaining constantly changing agent details helped drive the revision, according to the reporting. The RBI has pushed the implementation date back to January 1, 2027, from October 1, 2026, while giving existing uncertified agents a one-year window to obtain certification from the Indian Institute of Banking and Finance. Even so, certification remains mandatory before any agent can speak to borrowers about recovery.
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