MUMBAI — The Reserve Bank of India (RBI) has eased proposed norms on device disablement for EMI-financed gadgets and relaxed disclosure requirements for recovery agents, according to Business-Today. The revised directions on the conduct of regulated entities and engagement of recovery agents retain safeguards for borrowers while giving lenders operational flexibility.
Graduated device restrictions replace 90-day bar
The final norms, as reported by Business-Today, allow lenders to impose gradual restrictions on mobile phones, tablets and laptops financed through EMIs. This replaces the earlier proposal that barred such action until a loan turned 90 days past due.
Under the final framework:
- No restriction may be imposed until a loan is at least 30 days past due and a formal notice has been served.
- Between 30 and 60 days past due, lenders may introduce graded curbs on device functionality, although outgoing calls cannot be blocked during this period.
- Full contractual restrictions can be enforced only after a loan crosses 60 days past due.
| Parameter | Earlier proposal | Final norms |
|---|---|---|
| Restriction start | No action until 90 days past due | No restriction until 30 days past due + formal notice |
| 30–60 days past due | Not specified | Graded curbs; outgoing calls cannot be blocked |
| Full contractual restrictions | After 90 days past due | After 60 days past due |
| Implementation date | Oct 1, 2026 | Jan 1, 2027 |
Borrower safeguards and data protection
RBI retained safeguards to protect borrowers even as it allowed operational flexibility, according to Business-Today. Incoming calls, SMS and emergency SOS features cannot be blocked under any circumstances, and restrictions must not prevent borrowers from carrying out work or employment-related activities.
Lenders and their service providers must obtain certification for locking software from the original equipment manufacturer or the operating system platform. RBI has also barred lenders from accessing personal data such as contacts, call logs, photos, location history or SMS. Devices must be unlocked within one hour of funds realisation, and lenders must compensate borrowers at Rs 250 per hour for delays, capped at the loan amount disbursed.
Recovery agent disclosure diluted
RBI has also diluted its earlier proposal requiring banks to publicly disclose granular details of individual recovery agents, the report said. Industry participants had flagged high attrition among recovery personnel and the operational burden of maintaining updated records. Accepting these concerns, RBI has dropped the requirement to publish names and personal details of individual agents on bank websites.
However, RBI has not allowed uncertified recovery agents to interact with borrowers before obtaining mandatory certification.
Implementation timeline and business implications
Among other changes, RBI has deferred the implementation date of the norms to Jan 1, 2027 from Oct 1, 2026 and allowed a one-year transition period for certification of recovery agents through the Indian Institute of Banking and Finance for newly covered entities, according to Business-Today.
For CFOs and treasury professionals monitoring India's digital lending sector, the revised rules define a clear, time-bound enforcement ladder for device-financing portfolios. The compensation formula — Rs 250 per hour for delayed unlocks, capped at the loan amount — creates a measurable liability for lenders and their service providers. The certification requirement ties locking tools to OEM or OS platform approval, adding a compliance step that must be completed before deployment. The three-month deferral and separate one-year transition for agent certification give regulated entities a defined window to implement software certification, agent training, and borrower-notification processes required under the final directions.
Sources:
