If the loan is not repaid, your phone 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 rules, lenders will be able to lock the phones of those who are unable to repay the loan from a distance. Overall, the implementation of this RBI rule will increase the power of lenders.
Under this rule, lenders can lock your phone from a distance, let us know how your phone can be locked from a distance?
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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 the telecom regulator, there are more than 1.16 billion mobile connections in a country with a population of over 1.4 billion
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 in the borrowers' phones while issuing loans to lock the device. After talks with lenders, the RBI may issue guidelines on phone-locking mechanism along with updating the Fair Practice Code within the next few months.
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The RBI wants to ensure two things, first that the lenders can recover the loan money by locking the phone and secondly that the customers' data is also kept safe. According to the Economic Times report, the RBI spokesperson has not yet given any answer in this matter.
Summary
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. According to the credit bureau CRIF Highmark, loans below Rs 100,000 are more risky by default.
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