Missed EMI? Your Mobile Phone Could Get Locked — RBI’s New Plan
New Delhi (The Uttam Hindu): Approval may soon be given to lock mobile phones taken on loan. Reserve Bank of India (RBI) is now considering giving such facility to loan giving institutions. According to reports, RBI can update its fair practice codes, so that increasing cases of default can be dealt with. Amidst increasing default cases, banks and finance companies are likely to get this facility, so that they can lock the users' phones in case of non-payment of loan.
If you do not pay EMI of the mobile phone taken on loan it will be locked, RBI is preparing to bring a new rule: According to a study by Home Credit Finance in 2024, one in every three consumer electronic products in India is purchased on a small loan with smartphones being at the forefront. India, which has a population of 1.4 billion has 1.16 billion mobile connections, which makes it clear that this decision can affect crores of people.
Earlier also, many lenders used to resort to third-party apps to lock the mobiles taken on loan. These apps were installed in the phone and locked the phone in case of loan default. However, last year RBI banned such practice. Now once again RBI is preparing to formalize this system. For this, the central bank can issue a guideline which may come out in the next few months.
To implement this process, banks and NBFCs (non-banking finance companies) can use a special app. This app will be installed in the phone at the time of mobile purchase. Apps like Google Device Lock Controller, Samsung Finance+ (for Samsung users only) can be used for this purpose.
According to reports, lenders will have to take explicit permission from the customer before installing the app on the phone. It will also be ensured that lenders cannot access the user's personal data. Any phone can be locked only if the customer does not pay the loan. However, at present no official announcement has been made by RBI in this regard. But according to sources, this step is being taken with the aim of giving recovery power to small loan lenders and ensuring the security of consumers' data.
The proposal has sparked a debate on data privacy and consumer rights. Experts believe that if transparency and appropriate security measures are adopted the move could be positive for the financial sector but consumer consent and data security must be given top priority.