Your Phone Won’t Be Locked Instantly for EMI Default! RBI Announces New Rules, Click to Know More

RBI has introduced new guidelines for loan-based gadget recovery, covering device restrictions, customer notices, privacy protection, and recovery procedures followed by banks and finance companies.

RBI New Guidelines (Img: AI Generated)

New Delhi: The Reserve Bank of India (RBI) has issued strict guidelines regarding the remote locking of gadgets, including mobile phones, laptops, and tablets, purchased on loan, as well as the loan recovery process. The RBI has clarified that banks or finance companies cannot immediately lock a gadget upon an EMI default.

When can the device be shut down?

If you have purchased a mobile phone or any other gadget on loan and fail to pay the EMI for some reason, your device will not be locked immediately. If an EMI remains overdue for more than 30 days, the customer will first be issued a notice, and certain restrictions may be imposed. Only if the EMI remains overdue for more than 60 days will banks or finance companies be able to completely shut down the device.

On which devices will the new loan rules apply?

According to the RBI, this rule applies only in cases where the loan was specifically taken to purchase a device. If you have taken a personal loan, consumer loan, or any other loan that is not directly linked to the purchase of a smartphone, tablet, or laptop, then that device cannot be locked for loan recovery purposes.

Which functions will remain active after the lock?

Even when a remote ban is imposed due to non-payment of EMIs, certain essential device functions must remain operational. During the restriction period, essential functions related to emergency communication, such as incoming calls, SMS, and SOS, cannot be disabled. Additionally, features essential for work and employment will not be shut down.

Can they access private data?

According to the new RBI framework, when a bank or lender imposes a ban on the device, recovery agents cannot access the phone's contact list, photos, videos, messages, call logs, location history, or any other personal information.

Have stricter measures been introduced for recovery agents as well? Under the RBI's new guidelines, banks are required to formulate a comprehensive recovery policy. Before appointing any recovery agency, banks must conduct thorough and proper due diligence. Recovery agents may contact customers only between 8:00 am and 7:00 pm. It will be mandatory for banks to record all calls made by recovery agents and preserve these records for at least six months.