Today, many people purchase smartphones through EMI plans. However, some customers miss payments due to different reasons.
After missing an EMI, many people worry about immediate phone locking by banks or finance companies. Therefore, RBI has introduced new loan recovery rules for such situations.
According to the new guidelines, lenders cannot instantly lock phones because of pending EMIs. These rules will become effective from January 1.
What Are RBI’s New Loan Recovery Rules?
RBI’s updated recovery rules will start from January 1 next year. Under these guidelines, lenders must follow a proper process before restricting phone access.
Banks and finance companies cannot lock devices immediately after one missed EMI. Instead, they must provide a notice before taking action.
Additionally, the phone locking system must receive certification from the smartphone manufacturer or operating system platform. RBI said sudden complete phone shutdowns without information violate the rules.
Important Features Will Continue After Phone Lock
Even after restrictions, certain essential services will continue working.
- Incoming calls cannot be blocked.
- SMS services will remain available.
- Emergency SOS features will stay active.
- Restrictions cannot completely stop essential user activities.
When Can Lenders Start Taking Action?
If EMI dues continue beyond 30 days, lenders may apply some restrictions after sending a notice.
Furthermore, complete registration blocking or phone locking action can begin only after dues remain unpaid for 60 days or more.
Before such action, customers will receive time to clear pending amounts.
Which Loans Come Under These Rules?
These RBI guidelines apply to various loans, including:
- Smartphones purchased through EMI plans.
- Personal loans.
- Home loans.
- Car loans.
The new framework aims to ensure lenders follow proper procedures during loan recovery.
