RBI Just Made It Much Harder For Lenders To Brick Your Phone Over A Missed EMI

It's a scenario more borrowers have run into than banks probably like to admit: a delayed EMI, and suddenly the phone that was financed refuses to unlock. The Reserve Bank of India has now stepped in to draw firm limits around that practice, and the new rules read like they were written with a lot of frustrated phone owners in mind.

Under the fresh guidelines, lenders can only remotely restrict a mobile phone, tablet, or laptop if the loan that paid for the device specifically allows it, and even then, only after the account has been overdue for at least 30 days. Full restrictions can't kick in immediately either, they have to be rolled out gradually, with lenders barred from using every available limitation until the default crosses 60 days.

Some things stay off-limits no matter how overdue the account is. Outgoing calls, text messages, and the SOS emergency function can never be blocked, and borrowers can't be cut off from using the device for their job. Any locking mechanism a bank wants to use must first be certified by the device's operating system or manufacturer, and borrowers are entitled to check the status of any restriction on their device at any time.

There's a penalty built in too. If a lender locks a device wrongfully, or fails to restore it after the borrower has paid up, that borrower is owed Rs 250 for every hour the restriction stays in place, capped at the loan's principal amount.

The central bank also tightened the rules around recovery agents more broadly, banks must publish a list of approved agents on their websites, train them to behave respectfully, and ensure no borrower or guarantor is contacted or visited outside the 8 AM to 9 PM window without their explicit consent.