RBI Bars Lenders From Locking Borrowers’ Devices Except For Gadget Loans
The RBI has barred banks and other regulated entities (REs) from disabling or restricting borrowers’ mobile phones, tablets or laptops…
The Reserve Bank of India (RBI) has prohibited banks and regulated entities from disabling or restricting borrowers' mobile phones, tablets, or laptops as a loan recovery measure, except in cases where the loan was specifically taken to finance the device. These revised guidelines will take effect from January 1, 2027, and are part of the central bank's updated framework for loan recovery and engagement of recovery agents.
Lenders may employ technology-based methods to limit or disable a borrower's device for repaying debts tied to a lender-financed device, provided strict safeguards are observed. The RBI has instructed regulated entities to follow a graduated approach instead of immediately disabling devices, ensuring that essential features like incoming calls, SMS, emergency SOS services, and government notifications remain accessible.
The central bank has also required that Original Equipment Manufacturer (OEM) certification be obtained for device-locking solutions provided by third-party service providers.
Written by urgent.news from Inc42's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
