The Reserve Bank of India has implemented a new framework from 2027 to curb aggressive loan collection tactics, restrict contact hours, and regulate remote-locking of financed devices to protect borrowers’ rights.
India’s central bank has moved to curb aggressive loan collection practices, issuing a framework that limits when lenders and their agents may contact borrowers and sets out clear penalties for misuse of remote-locking tools on financed devices. According to The Sentinel Assam, the Reserve Bank of India said the rules will take effect on January 1, 2027, although Livemint reported earlier that the same set of norms was due to begin on October 1, 2026.
The new regime restricts recovery calls and visits largely to between 8 a.m. and 7 p.m., unless the borrower asks for or explicitly agrees to contact outside those hours. Agents are barred from abusive, threatening or humiliating behaviour, including repeated harassment, anonymous calls and efforts to shame borrowers in public or on social media. The RBI also expects lenders to stay responsible for outsourced recovery staff and to make sure borrowers are told which agency is handling collection.
Before any face-to-face recovery visit, lenders must give at least one day’s notice, and agents must carry valid identification, an authorisation letter and the relevant recovery notice. According to the reports, banks are also required to record recovery-related conversations, retain contact details for at least six months and ensure staff are trained so incentive structures do not encourage heavy-handed tactics. The RBI further says agents should avoid contacting borrowers during bereavement, medical emergencies or family events.
The framework also creates guardrails for remote locking of financed smartphones, tablets and laptops. Such restrictions may be used only where the loan was specifically taken to buy the device, and only after the account has remained overdue for at least 30 days, with full restriction possible after 60 days of continued default. Even then, essential functions such as incoming calls, SMS, emergency communications and work-related features must remain available, while lenders are barred from using remote access to harvest unrelated personal data. Once the debt is cleared or regularised, full access must usually be restored within one hour, with compensation set at Rs 250 per hour of delay, subject to a cap.
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