RBI Sets New Rules on Remote Locking of Financed Phones, Bans Instant Restriction Over Missed EMI

Mumbai: The Reserve Bank of India has introduced a regulatory framework governing the remote restriction of smartphones, tablets and laptops financed through loans, set to take effect on January 1, 2027.

Under the new rules, lenders cannot remotely disable a financed device immediately after a missed EMI. Restrictions may begin only after the loan is overdue by at least 30 days, and even then must follow a phased approach rather than an immediate full lock. Complete device restriction is permitted only after 60 days of non-payment.

The framework also carries strict privacy safeguards: lenders and third-party service providers using the technology must obtain certification from the device manufacturer or operating system platform, and cannot access personal data such as contacts, messages, photos or location history.

Once outstanding dues are cleared, all restrictions must be lifted within one hour. Lenders that fail to do so, or restrict a device wrongly, must compensate the borrower at a rate of ₹250 for every hour of delay.

The rules apply only to devices financed through a specific loan for that device, and lenders cannot use the technology to enforce recovery on unrelated personal or unsecured loans.