Have you also taken a phone on loan? Pay the EMI on time; if you default, the handset will be locked.

Reserve Bank of India: Lenders used to use an app pre-installed in the phone taken on loan, in which the phone was locked in case of default. There is talk of bringing this system again.

Reserve Bank of India: If you have also taken your phone on loan, then this is news of your work. Actually, the Reserve Bank of India (RB) is thinking of bringing a new rule. Under this, the Reserve Bank can remotely lock your phone if the loan is not repaid. After this, consumers will not be able to use that phone. RBI is going to take this step in view of the increasing cases of loan default, so that lenders can get some relief.

In 2024, Home Credit Finance did a study, which showed that more than one-third of consumer electronics, including phones, in India are purchased on small personal loans. According to the telecom regulator TRAI (Telecom Regulatory Authority of India), India has more than 1.16 billion mobile phone connections, while the country's population is 1.4 billion.

Talks are going on again on the mechanism of locking the phone

Let us tell you that earlier also lenders used a pre-installed app in the phone taken on loan, in which the phone was locked in case of default. However, last year the Reserve Bank banned this practice and asked banks and NBFCs to stop locking the phone.

Under this process, an app is installed while taking a phone on loan, through which the phone is locked later. Now RBI is again thinking about issuing its guideline on the mechanism of locking the phone in the next few months. Talks are going on with the lenders in this regard. However, nothing has been officially said about this yet.

Data privacy will be taken care of

Keeping in mind the data privacy of consumers, a mechanism is being discussed through which lenders can be prevented from accessing the data of users and the data remains completely safe. RBI wants to ensure that lenders have the right to recover small loans.

Along with this, there should be no harm to the data of the users. If this new rule of RBI is implemented, then major consumer lenders like Bajaj Finance, DMI Finance and Cholamandalam Finance can benefit as it will speed up recovery and it will become easier to give loans to customers with bad credit.