RBI bars banks from locking borrowers’ phones as recovery tool
The Reserve Bank of India has prohibited commercial banks from restricting or disabling the a borrower’s mobile phone, tablet or laptop as a loan recovery tool, except where the device itself was bought with the bank’s money, and has fixed compensation of Rs 250 an hour where such restrictions are wrongly applied or not lifted in time.
The curbs form part of the Reserve Bank of India’s revised draft directions on the conduct of recovery agents. The directions take effect from January 1, 2027, and apply to all commercial banks other than small finance banks, payments banks, regional rural banks and local area banks.
