Lenders have been allowed to impose gradual restrictions on the devices after 30 days of the payment being overdue. Purchased a smartphone, laptop or tablet via loan financing?
What happens if you miss an EMI? Can the lender lock your phone or block access to the device?
According to a study by Home Credit Finance, the single biggest reason for borrowing in 2025 remained the purchase of smartphones and home appliances. The Reserve Bank of India (RBI) has laid out some guidelines for lenders on recovery of loans, and whether they can block or lock the device that has been purchased via EMI financing.
This new framework will come into effect from January 1, 2027. The new framework governing loan recovery practices comes on the back of increasing complaints from borrowers who have alleged harassment in the recovery process.
This harassment has in the past taken the form of intimidation through social media and also the use of abusive language. In 2024, RBI asked lenders to stop the practice of locking phones of borrowers in case of default.
Lenders were doing this using an app that was installed at the time of the loan issuance. In May this year, the RBI had released a draft framework that outlined proposed norms on the " Conduct of Regulated Entities in Recovery of Loans and Engagement of Recovery Agents".
The central bank had invited comments from stakeholders. The final norms have now been released.
What do the new rules mean for you? What are your rights as a borrower and what does a loan default for EMI-financed devices mean for you?
We break it down: RBI’s new rules: Can your phone be locked? RBI has clearly told lenders that they cannot disable the borrower’s mobile phone, laptop or tablet in cases of loans taken for home, car or other personal loans.
The restrictions to use can only come in place for devices that have been financed via loans." which restricts or disables any of the functionalities of a mobile device of a borrower such as mobile phone, tablet and laptop as a recovery tool, except to rec over its loan dues arising out from financing of such a device," RBI has said.
RBI’s New EMI Device Rules: What Lenders Can DoEven in such cases the restrictions have to be gradual and with certain rules in place. Let’s take a look at what the lender can and can’t do: What the lender can do: Lenders have been allowed to impose gradual restrictions on the devices after 30 days of the payment being overdue.
