Since the phones have become smart, their purchasing by the users have become smarter. Earlier, a phone was only a tool for communication, but now it has become much more.

As the costs of buying a phone has increased many folds, the option of and EMI has become prevalent. But in cases where you missed the EMI for the phone/tablet/laptop purchased, the Reserve Bank of India (RBI) has come up with some guidelines.

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.

RBI has told banks and NBFCs 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.

“A bank shall not deploy any technology-based mechanism…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 recover its loan dues arising out from financing of such a device,” RBI has said.

Under the new guidelines, in case the EMI is overdue for less than 30 days then the lender cannot do anything to the device. Bank needs to send you a formal notice.

In case the loan remains overdue between 30-60 days, then the gradual restrictions can be introduced. The full contractual restrictions can only be imposed after the loan has been overdue for more than 60 days.

The outgoing and incoming calls cannot be stopped, and SMS, Emergency SOS and any restrictions that impact work or employment are not allowed.