Mumbai: The Reserve Bank of India (RBI) has softened parts of its proposed framework governing loans used to finance mobile devices, clarifying that lenders must restore restricted device functions within one hour of actual receipt of dues rather than when a borrower merely initiates payment.
The RBI also allowed lenders to cap the total compensation payable to the borrower at the amount of loan disbursed, which was earlier proposed at ₹250 per hour for delays in restoring device functionality.
The final guidelines, issued on Thursday as part of a broader framework governing recovery practices and the engagement of recovery agents by banks, permit lenders to use technology-based mechanisms to restrict functionalities of financed devices in case of loan default, subject to strict safeguards. The norms will come into force on January 1, 2027, instead of the earlier proposed date of October 1, 2026.
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The final guidelines state that restrictions imposed on a financed mobile device must be reversed "not later than one hour of realisation of the dues from the borrower". Under the draft directions, the one-hour timeline was linked to the borrower "curing the default". Lenders had argued that the phrase was ambiguous and suggested that a default should be considered cured only after funds are realised by the lender, rather than when a borrower initiates payment. The RBI accepted the suggestion and modified the directions to define the trigger as the "realisation of dues" by the lender.
On compensation, lenders will continue to be liable to pay ₹250 per hour for delays attributable to them in reversing restrictions. However, the total compensation payable to a borrower has now been capped at the amount of the loan disbursed.
