RBI: If you do not repay the loan of the phone taken on EMI, it will be locked, RBI is bringing a new rule..

The Reserve Bank of India has planned to make a new rule to increase the power of lenders. After the implementation of the new RBI rule, lenders will be able to remotely lock the phones of those who are unable to repay the loan. Overall, the implementation of this rule of the RBI will increase the power of lenders. However, this is likely to increase consumer rights concerns.

A study conducted by Home Credit Finance in 2024 revealed that more than one-third of consumer electronics, such as mobile phones, are bought by most people on loan. According to credit bureau CRIF Highmark, most people miss EMI payments in the small loan segment below Rs 100,000.

The phone will be locked, but the data will remain safe.

Sources said that last year, the Reserve Bank of India had asked lenders to stop locking the phones of defaulting borrowers. An app will be installed on the borrower's phone while issuing a loan to lock the device. After discussions with lenders, the RBI may issue guidelines on the phone-locking mechanism along with updating the Fair Practice Code within the next few months.

RBI wants to ensure two things: firstly, that lenders can recover loan money by locking the phone, and secondly, that customer data is also kept safe. According to the Economic Times report, the RBI spokesperson has not yet given any answer in this matter.

If this rule of RBI is implemented, then it can benefit companies giving loans for consumer products such as Bajaj Finance, DMI Finance and Cholamandalam Finance, which can increase the chances of recovery.

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