In view of the increasing default cases in the digital loan sector, now finance companies and banks are preparing to remotely lock the smartphones of such customers. Let’s know how
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Smartphone EMI Default Consequences: If you have bought a smartphone on EMI and are not paying the installments on time, then be careful now. Banks or NBFC companies will now be able to remotely lock the phones of such customers, due to which your phone can become completely useless.
Under the instructions of RBI, many digital loan apps and finance companies are now activating tracking mode on such smartphones. If a customer does not pay EMI for 90 days, the phone will be locked remotely. After this you will neither be able to make calls nor run apps.
Why was this decision taken?
The NPA of digital loans was 2.5% in 2022, which increased to 5% in 2024. The highest default was seen in smartphones ranging from ₹ 5,000 to ₹ 50,000 taken on EMI. This is why companies are taking this strict step. If this rule is implemented, then in case of non-payment of the loan, the lending bank or financial company will be able to lock your mobile phone remotely.
Let us tell you that in 2023, PhonePe had planned to remotely block the smartphones of about 10,000 defaulters, but at that time RBI had banned this move. Now RBI is considering implementing this system with the consent of the customer and legal basis.
What will be the effect?
If this proposed rule is implemented, then EMI recovery will become easier for loan giving companies. Along with this, NPA (Non-Performing Assets) will come down and customers will be under pressure to pay the installment on time.
RBI has sought suggestions from all stakeholders on this draft. It is expected that the final guidelines will be issued by 2026. According to reports, Bajaj Finserv and Paytm are already trialing the IMEI tracking system.
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