The Reserve Bank of India (RBI) has drawn a clear line on how banks and other regulated lenders can use technology to recover overdue loans.

Under the final loan recovery directions issued on August 6, lenders will not be allowed to remotely lock or disable a phone, tablet or laptop if the loan was not taken to finance that particular device. The new framework will come into force on January 1, 2027.

Even when a device was financed by the lender, restrictions will have to follow strict conditions and cannot be imposed immediately after an EMI is missed.

When Can a Lender Restrict Your Device?

The RBI allows remote device restrictions only when the loan was specifically used to purchase the device in question.

The loan agreement must clearly state that such technology may be used and explain how restrictions could be imposed. Borrowers must also receive advance information about the possible restrictions.

Importantly, lenders cannot use a normal personal loan as a reason to remotely disable a borrower’s existing smartphone or computer.

No Device Restrictions During the First 30 Days

The RBI has introduced a phased system for device restrictions.

A lender cannot restrict any function of a financed device until the associated loan has remained overdue for at least 30 days, provided the borrower has also received the required notices.

After 30 days, lenders may begin restricting non-essential functions in stages.

The full range of restrictions permitted under the loan agreement can only be applied once the loan becomes 60 days past due. Outgoing calls also cannot be restricted before this 60-day point.

This means a lender cannot completely disable a financed phone immediately after a borrower misses an EMI.

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Calls, SMS and Emergency Services Must Continue

The new RBI framework protects several essential functions regardless of the level of restriction imposed.

Lenders cannot block:

• Incoming calls
• SMS messages
• Emergency SOS functions
• Functions required for work or employment

Borrowers must also be able to see the status of restrictions placed on their device.

Banks and their technology providers will need appropriate certification for the restriction mechanism from the device manufacturer or operating-system platform wherever such certification is available.

Lenders Cannot Access Personal Data

The RBI has also placed restrictions on how lenders can use information stored on a device.

Recovery technology cannot be used to access or exploit personal information such as:

• Contacts
• Messages
• Call logs
• Photographs
• Location history

The restrictions are intended to facilitate recovery of legitimate dues without giving lenders unrestricted access to a borrower’s private data.

Device Must Be Restored Within One Hour

Once the borrower pays the outstanding dues, the lender must restore all restricted functions within one hour.

The same one-hour requirement applies where restrictions were imposed wrongly or restoration is delayed for reasons attributable to the lender.

In such cases, the borrower can receive compensation of ₹250 for every hour of delay, subject to a maximum amount equal to the loan originally disbursed.

Once the loan has been completely repaid, the lender must also give up access to the device-restriction technology. If borrowers need to remove associated software themselves, the lender must provide instructions.

Borrowers will continue to have the right to make partial or full prepayments at any stage.

RBI Tightens Rules for Recovery Agents

The new framework also introduces stricter rules for calls and visits by recovery agents.

Banks and recovery agents can ordinarily contact or visit borrowers or guarantors only between 8 AM and 7 PM. Communication outside this period is allowed only when the borrower or guarantor has specifically requested or authorised it.

Borrowers can also request that calls or visits be avoided at particular times, and such requests should ordinarily be respected.

Before the first physical recovery visit, lenders must provide at least one day’s notice and inform the borrower about the recovery agency involved.

Recovery agents must carry proper identification and authorisation documents.

Recovery Calls Must Be Recorded

Lenders will also have to maintain stronger records of recovery activity.

Recovery-related calls must be logged and recorded, with records generally preserved for six months. Borrowers must be informed that their conversation is being recorded.

The RBI has prohibited recovery agents from using:

• Threatening or abusive language
• Excessive or repeated calls
• Public humiliation
• False claims about debts or consequences of non-payment
• Social media posts exposing borrowers’ personal information

The rules are designed to prevent aggressive recovery practices while allowing regulated lenders to pursue legitimate unpaid dues.

Which Lenders Will Have to Follow the Rules?

The final directions apply across a broad range of regulated financial institutions, including commercial banks, small finance banks, regional rural and co-operative banks, NBFCs, housing finance companies and other RBI-regulated entities.

The new framework follows feedback received by the central bank on its revised draft issued in May.

Bottom Line

A bank cannot simply lock your personal phone because you defaulted on a normal loan.

From January 1, 2027, remote restrictions will be permitted only in specific circumstances where the lender financed the device itself and the loan agreement provides for such action. Even then, restrictions must be phased, essential services must remain available, personal data must be protected and the device must be restored promptly after payment.

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The post Can a Bank Lock Your Phone After Loan Default? RBI Sets Strict Rules first appeared on Rightsofemployees.com.

Today we will answer both these questions. Personal finance experts say that according to the Income Tax Rules, the total cash deposit or withdrawal in a savings account during 1 financial year should not exceed Rs 10 lakh. Apart from this, according to section 269ST, a person cannot take a total of Rs 2 lakh or more in cash from a person in a single transaction or in transactions related to an event in a day. If there is a total cash deposit of more than Rs 10 lakh in all your savings accounts in a financial year i.e. between April 1 and March 31, then the Income Tax Department should be informed. Banks have to disclose such transactions, even if they are spread across multiple accounts.

High value transactions

Now the question is, what will happen if more than Rs 10 lakh cash comes into your savings account in a financial year? Any amount above this limit will be considered a high value transaction. Banks or financial institutions will have to inform the Income Tax Department about this under Section 114B of the Income Tax Act, 1962. Apart from this, you will have to provide PAN number to deposit more than Rs 50 thousand in a day. If you do not have a PAN, then you will have to submit Form 60/61 as an alternative.

How to respond to income tax notice?

To respond to an income tax notice related to high value transactions, you must have sufficient evidence to support your claim regarding the source of funds. These can be bank statements, investment records and inheritance documents. If you are unsure or concerned about the source of cash, you can consult a tax advisor.

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The post High value transactions: How much cash should you keep in your savings account so that you don’t get an income tax notice? first appeared on Rightsofemployees.com.

According to a report by CNBC-Awaaz, the Employees Provident Fund Organization (EPFO) is going to make radical changes in the PM account withdrawal process. EPFO ​​will provide an ATM card to the PF holder just like banks. Money can be withdrawn with the help of this ATM. That means there will be no hassle of filling forms and no need to visit the office. The government is also considering abolishing the limit of PF contribution and increasing the PF limit under EPFO ​​3.0 version.

This facility will not be available at all ATMs. Under this facility, EPFO ​​will tie up with select banks. These ATM cards can be used only in those ATMs with which EPFO ​​has an agreement. This scheme can be implemented by May-June 2025. This new facility will be a big relief for PF account holders, allowing them to easily access their funds and also improve their pension. Currently, EPF members have to wait for 7 to 10 days to transfer the withdrawal amount to their bank account linked to the EPF account. This happens after completing all the withdrawal formalities and submitting the required documents to the EPFO.

Preparations are also being made to change the pension scheme

The government is also planning to remove the current limit of 12% of employee contribution in PF. Now employees will be able to contribute more as per their wish, which will also increase their pension. The money for higher contribution will go to EPS (Employees Pension Scheme), which will provide more pension in future.

There is also a consideration on increasing the salary limit. Currently, the wage ceiling for PF is Rs 15,000, which is being considered to be increased. Employees earning more than this salary will also get the benefit of this scheme. Along with this, the government is also planning to implement PAN 2.0. Now the new PAN card will come directly on the e-mail, which will make the process of making PAN fast and simple.

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The post New facility: No need to fill any form, PF money can be withdrawn easily without any hassle first appeared on Rightsofemployees.com.

Paying rent through third party apps will be expensive

1 percent charge will be levied on all rental transactions done through third-party payment apps like CRED, Paytm, Mobikwik, Freecharge. This charge will be capped at Rs 3,000 per transaction. These rules will come into effect from August 1.

Extra charge will be levied on educational transactions too

Apart from rent payment, educational transactions are also going to be expensive. The charge on payment through third party apps for educational transactions has also been increased to 1%. However, there will be no charge on transactions through the college or school website or their POS machines and international educational payments.

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Fuel transactions will also become expensive.

If you make a fuel payment of less than Rs 15,000 through HDFC Bank credit card, you will not be charged extra. However, if you make a fuel payment of more than Rs 15,000 at one go, you will have to pay 1% extra charge, the maximum limit of which is Rs 3,000.

Utility payments will become expensive

If you use a credit card to pay utility bills, then you need to be cautious. Actually, there will be no extra charge for utility transactions of less than Rs 50,000 through HDFC Bank credit card, while on payments above this amount, you will have to pay 1% charge per payment, which has a limit of Rs 3,000 per transaction.

Change in late payment charges:

The late payment fee structure has been revised based on the outstanding amount, which will range from Rs 100 to Rs 300.

Change in Tata Neu Card rules as well

If you are a user of Tata Neu Infinity HDFC Bank Credit Card and Tata Neu Plus HDFC Bank Credit Card, then there is bad news for you. There is going to be a big change in the cashback structure on UPI payments made through these two credit cards. These changes will also come into effect from August 1, 2024. Now if you make UPI payments by linking these cards to the Tata Neu app, then you will get more benefits. If you make UPI payments by linking these cards to other UPI apps except the Tata Neu app, then you will get less benefits.

The post New Credit Card Rules: These new rules for HDFC Bank credit card will be implemented from August 1 first appeared on Rightsofemployees.com.

HDFC Bank UPI Update: If you are a customer of private sector HDFC Bank, then there is a big news for you. On July 13, HDFC customers will not be able to use some services including UPI. Actually, HDFC Bank will upgrade the system on July 13, due to which the UPI service of the bank will also be temporarily affected. Also, in the meantime, customers will not be able to check their bank balance.

It’s time for a system upgrade

The purpose of the system upgrade is to improve the performance and capabilities of the bank and to increase reliability. According to the bank, the time for the system upgrade is 3 am on July 13 and it will be completed by 4.30 pm on the same day. During this period, customers will not be able to avail some services. UPI services will be closed at two specific times.

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These services including UPI will remain closed at this time

According to the information, on July 13, UPI service will not work from 3:00 am to 3:45 pm and from 9:30 am to 12:45 pm. Netbanking and mobile banking services will not be available during the entire upgrade period. Apart from this, all fund transfer modes including IMPS, NEFT, RTGS will also not be available during the upgrade period.

Transactions will continue through debit card and credit card

During the system upgrade period, customers can withdraw cash from any ATM using their HDFC Bank debit card or credit card. At the same time, the bank balance will be shown based on the balance at 7.30 pm on July 12. Apart from this, customers can continue to use their HDFC Bank debit card or credit card on swipe machines at shops. HDFC debit card and credit card can continue to make online purchases, reset PIN or do other card activities.

Advice from the bank

To avoid any kind of disruption, the bank has advised to withdraw sufficient amount and complete all the necessary work like fund transfer etc. before 7:30 pm on 12 July 2024. To reduce the inconvenience, this work will be done by the bank on Saturday, 13 July 2024. Banks will remain closed on this day due to being the second Saturday. For more information and updates, visit HDFC Bank website or contact customer service.

The post HDFC Bank customers, these services including UPI will remain closed on this day first appeared on Rightsofemployees.com.