How to Restrict Linux Users to Their Home Directories

You can use rbash (restricted bash shell).

If bash is started with the name rbash, or the -r option is supplied at invocation, the shell becomes restricted. A restricted shell is used to set up an environment more controlled than the standard shell. It behaves identically to bash with the exception that the following are disallowed or not performed:

* changing directories with cd
* setting or unsetting the values of SHELL, PATH, ENV, or BASH_ENV
* specifying command names containing /
* specifying a file name containing a / as an argument to the . builtin command
* Specifying a filename containing a slash as an argument to the -p option to the hash builtin command
* importing function definitions from the shell environment at startup
* parsing the value of SHELLOPTS from the shell environment at startup
* redirecting output using the >, >|, <>, >&, &>, and >> redirection operators
* using the exec builtin command to replace the shell with another command
* adding or deleting builtin commands with the -f and -d options to the enable builtin command
* Using the enable builtin command to enable disabled shell builtins
* specifying the -p option to the command builtin command
* turning off restricted mode with set +r or set +o restricted.

How to restrict user ?

pico /etc/passwd

Then edit the user that you want to be restricted. Replace /bin/sh with /bin/rbash .

Example:
Before:

user:x:1000:1000:user,,,:/home/user:/bin/sh

After:

user:x:1000:1000:user,,,:/home/user:/bin/rbash

Done.