A large portion of consumer electronics in India, such as mobile phones, are purchased on small personal loans. According to a 2024 study by Home Credit Finance, more than one-third of consumer electronics are purchased on installments.
RBI New Rule: If you also buy a phone on installment, then there is important news for you. It is reported that the Reserve Bank of India (RBI) is considering a new rule, under which if a customer does not repay the loan of a mobile phone bought on installment, then the bank will remotely lock his phone and RBI’s permission for this can be given soon. Let us tell you that the purpose of this step is to reduce the bad loans of banks.
What is the report
According to the report, this move is expected to provide relief to banks from stuck loans (NPA). A large part of consumer electronics in India, such as mobile phones, are purchased on small personal loans. According to a 2024 study by Home Credit Finance, more than one-third of consumer electronics are purchased on installments. At the same time, the mobile market in India is very big. According to TRAI, there are more than 1.16 billion mobile connections in the country. In such a situation, if this proposal of RBI is implemented, then it will not only secure the banks but will also increase the pressure on the customers to repay the loan on time.
What is RBI’s preparation
According to media reports, it is reported that RBI is preparing to update its Fair Practices Code for banks and financial institutions in the coming few months. This update will include new guidelines related to phone-locking mechanism. Let us tell you that last year RBI had instructed banks and financial institutions to immediately stop the practice of locking the mobile phones of customers who do not repay the loan. This method was already being adopted, in which when a customer bought a mobile phone on installment, a special app was installed in the phone at the same time. Through this app, the bank or lender company got the right to lock the phone remotely if the customer did not pay on time.
What will be the new rule
According to the report, under the new rule, it will be mandatory to take the prior consent of the borrower before locking any phone. Banks and lenders will be strictly prohibited from accessing personal data from the locked phone. According to the source, RBI’s objective is to ensure that banks can recover small loans. Also, customers’ data remains safe.
