Loan: Can your mobile number be blocked for not repaying a loan? Find out the truth..

If you have taken a loan from a bank or an NBFC and, for some reason, have been unable to pay your EMI on time, there is no need to panic. Recently, messages have been circulating on social media and messaging apps claiming that if a person fails to pay their loan EMI, the bank can have their mobile number deactivated.

It is important to know that the Reserve Bank of India (RBI) has no rule authorizing banks or licensed lending institutions to disconnect a customer's mobile number for non-payment of EMIs.

Can a bank disconnect your mobile number?
A bank can remind you of your outstanding loan. It may send reminders via phone calls, SMS, email, or formal notices. If the loan remains unpaid for a long period, the bank may report this to credit bureaus, which could negatively impact your credit score. If necessary, the bank can also initiate recovery proceedings in accordance with the law. However, a bank cannot instruct a telecom company to disconnect your mobile number. Mobile services operate under telecom regulations; banks and NBFCs have no legal authority to have them shut down.

What has the RBI said?
The RBI has issued clear directives stating that banks and their recovery agencies must conduct recovery processes in a respectful and lawful manner. If a recovery agent intimidates or threatens a customer, or attempts to exert mental pressure by providing false information, it is considered a violation of the RBI's Fair Practices Code.

What happens if you don't pay your EMI?
This does not mean there are no consequences for missing an EMI payment. If you fail to pay your installments on time, you may incur late fees and penalties. Your CIBIL score could deteriorate, making it difficult to secure loans in the future. The bank may initiate recovery proceedings through legal channels and, if necessary, resort to court action or other legal remedies. However, blocking your mobile number is not part of these legal actions.

What should you do if you receive such a message?

If you receive a message or call stating that your mobile number will be deactivated for failing to pay an EMI, do not panic. First, request written information from the bank. Verify the claim by contacting the bank's customer care or grievance redressal department. Also, keep a screenshot or recording of such messages or calls so that you can file a complaint if necessary.

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