If you buy a phone on installment, then this news is important for you. The Reserve Bank of India (RBI) is thinking about a new rule. Under this rule, if a customer does not pay the loan of a phone bought on installment, then the bank can remotely lock that phone. RBI may give permission for this soon. The aim of this step is to reduce bad loans of banks.
This rule is expected to help banks deal with bad loans (NPA). In India, a large part of consumer electronics like mobile phones is bought on small personal loans. A 2024 study by Home Credit Finance said that more than one-third of consumer electronics are purchased on installments.
The mobile phone market in India is also very big. According to TRAI, there are more than 1.16 billion mobile connections in the country. If RBI brings this rule, then banks will be more secure. At the same time, customers will feel pressure to repay their loans on time.
What is RBI’s Preparation
According to media reports, RBI is planning to update its Fair Practices Code for banks and financial institutions in the coming months. This update will include new rules about the phone-locking system.
Last year, RBI had told banks and financial companies to stop locking customers’ phones for non-payment of loans. Earlier, when a customer bought a phone on installment, a special app was installed on the device. Through this app, the bank or lender could lock the phone remotely if the loan was not paid on time.
What Will Be the New Rule
As per reports, under the new rule, banks or lenders must take the customer’s permission before locking any phone. They will also be banned from accessing any personal data from the locked phone.
The main aim of RBI is to help banks recover small loans while keeping customers’ data safe.