India, Aug. 7 -- The RBI has barred banks and other regulated entities (REs) from disabling or restricting borrowers' mobile phones, tablets or laptops as a loan recovery measure, except where the loan was specifically taken to finance the device.

The revised directions, which will come into effect from January 1, 2027, form part of the central bank's updated framework governing the conduct of REs in loan recovery and the engagement of recovery agents.

Under the new norms, lenders cannot deploy technology-based mechanisms to restrict or disable a borrower's mobile device for recovering dues arising from personal, home, vehicle or any other loan that is unrelated to the device.

However, where the loan is used to finance the device itsel...