The Reserve Bank of India (RBI) has proposed a new rule for mobile phones purchased on loan. If borrowers fail to pay EMIs on time, lenders will be allowed to lock the phone remotely. This measure is aimed at small loans for electronics like smartphones.
Before implementing the lock, borrowers will be informed in advance and their consent will be taken. Lenders will not have access to any personal data on the device. The lock is meant purely as a recovery tool, helping companies recover unpaid loans more effectively.
Finance firms such as Bajaj Finance and DMI Finance are expected to benefit, as missed EMIs currently cause significant losses. However, critics argue that locking phones may affect essential services like banking, education, work, and communication.
The RBI plans to update its “Fair Practices Code” to balance lender safety and customer protection. Final guidelines are expected soon, and the banking and finance sectors are closely watching the development.
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