Financiers can't block borrower phones, online shaming barred

Key points

• MUMBAI: Mobile phone financiers will face restrictions on "mobile lock" practices under RBI's amended rules for loan recovery.
• Under the reworked draft regulation, lenders can restrict financed devices only under explicit contractual consent and after a 90-day default cycle with a staged 60-day and 7-day notice regime, while mandating that core functions such as incoming calls, internet, SOS, and public alerts remain accessible.
• the norms also require banks to unlock devices within one hour of payment or pay Rs 250 per hour as penalty.The draft introduces a more structured and technology-aware framework compared to the Feb 2026 version.
• While both drafts aim to curb harsh recovery practices, the May draft shifts focus from individual agents to organised recovery agencies, refines operational timelines, and adds detailed rules for technology-backed recovery.It also bars lenders from accessing borrower data on devices and prohibits sharing creditor information on social media, strengthening privacy alongside recovery...