RBI Bars Lenders From Locking Borrowers’ Devices Except For Gadget Loans

The Reserve Bank of India (RBI) has issued new directives prohibiting lenders from disabling or restricting borrowers' mobile devices, tablets, or laptops as a loan recovery measure, with exceptions for loans taken to finance the device itself. Effective from January 1, 2027, these revised guidelines are part of the RBI's updated framework for loan recovery and recovery agent conduct.

Under the new rules, lenders cannot use technology-based mechanisms to restrict or disable borrowers' devices for recovering dues on personal, home, vehicle, or other non-device-related loans. However, for loans used to finance the device, lenders may employ such measures under strict safeguards. The RBI has mandated that lenders and third-party service providers obtain certification from the device's original equipment manufacturer (OEM) or operating system platform before deploying such technology.

Lenders must also ensure that essential functionalities like incoming calls, SMS, and emergency services remain accessible to borrowers.

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