# RBI Tightens Loan Recovery Rules, Restricts Device Locking

2026-08-06T17:35:59+00:00 | Governance | Indian Opinion Desk

Corroboration: 1 independent outlet

The Reserve Bank of India has issued final rules making banks responsible for recovery agencies and outsourced loan collection. The framework takes effect on January 1, 2027. Banks must adopt board-approved recovery policies, monitor agents, record recovery calls and provide dedicated grievance channels. Agents will need certification from the Indian Institute of Banking and Finance or a linked institute. Banks cannot disable mobile phones, tablets or laptops for personal, car or home-loan defaults. Device restrictions are allowed only when the device itself was financed by the bank, after 30 days past due and with due notice. Full restriction can begin after 60 days. Incoming calls, SMS and emergency SOS must remain available. Banks must restore access within one hour of payment or pay Rs 250 per hour, subject to a cap equal to the loan amount.

## Coverage

- bfsi.economictimes.indiatimes.com <https://bfsi.economictimes.indiatimes.com/articles/what-changes-under-rbis-new-framework-for-loan-recovery-and-recovery-agents/133008775>
- thefederal.com <https://thefederal.com/category/business/rbi-bars-banks-from-disabling-mobile-devices-of-defaulting-borrowers-252766>
- ndtvprofit.com <https://www.ndtvprofit.com/business/rbi-bars-banks-from-locking-borrowers-mobile-phones-for-loan-recovery-11877858#publisher=newsstand>

Tags: banking, device blocking, loan recovery, RBI, recovery agents
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