Can your smartphone be locked when Loan EMI skip is there?
RBI Governor Sanjay Malhotra said after the MPC meeting on 1 October that the Reserve Bank of India is considering a proposal under which if no one does not pay EMI (equal monthly installments) on time, then the lenders will be allowed to lock the smartphone. Asked whether RBI would allow the phone purchased on installments in the event of EMI skip? The RBI chief said that the matter is under consideration as we have arguments of both sides (consumers and lenders). These arguments are being considered. Our main objective is to protect consumers rights and data privacy. Consumers rights are paramount for us… Also, we will also see how the interests of the lenders can be protected… ”
Discussion is going on
Answering this question, RBI Deputy Governor M. Rajeshwar Rao said that consumers are arguments of both sides in terms of rights, requirements, data privacy and balance of lenders needs… Therefore we are examining this issue and evaluating the party and the opposition and will take decisions on the appropriate time. According to a recent study quoted in his report by Reuters, in India, about one-third of consumer including smartphones, at the customer EMI. It also states that only last year, the RBI had decided to stop the lenders from locking the mobile phones of the defaulting customers.
What do you say on this matter?
Experts say that if the central bank allows the smartphone to lock in case of EMI being skipped, then the borrower’s clear consent will be necessary at the time of loan agreement. He said that this remedy is possible by installing the “device lock app” while signing the loan agreement. Experts said that in the event of certain installments are released, the device can be temporarily deactivated until the outstanding amount is repaid. Reuters report said that RBI could update its “fair behavior code” in a few months. According to experts, existing laws do not clearly allow this practice, making it under the purview of regulatory uncertainty.
Why is RBI considering this step?
Many reports have reported that the default rate on small loans, including smartphones and other consumer electronic items, is very high. By launching this option to lock the phone, experts believe that the increasing rate of default in small consumer loans can be reduced. If the lenders get the option to lock the device in the event of a loan lapse, then it will definitely deliberately discourage the lapse.