RBI Rule Phone Lock RemotelyImage Credit Source: FreePik/File Photo
Reserve Bank of India has planned to make a new rule to increase the power of lenders. After the introduction of new RBI rules, people who are unable to repay the loan will be able to lock the phone of those people from far away. Overall, the implementation of this RBI rule will increase the power of lenders. However, this is likely to increase the concerns of consumer rights.
A study conducted by Home Credit Finance in 2024 has revealed that most people buy more than one -third of consumer electronics such as mobile phones on loans. According to the telecom regulator, a country with a population of more than 1.4 billion has more than 1.16 billion mobile connections.
The phone will be locked, but the data will be safe
Sources said that last year the Reserve Bank of India had asked lenders to stop the phone locking of default borrowers. The app will be installed in the borrowers’ phones while issuing loans (loans) to lock the device. After negotiations with lenders, RBI can update the fair practice code within the next few months and issue guidelines on phone-locking mechanisms.
The RBI wants to ensure two things, first that the lender can be able to recover the loan money by locking the phone and second that the data of the customers should also be protected. According to the Economic Times report, the RBI spokesperson has not given any reply in this matter at present.
If this RBI rule came into force, it can benefit loans companies such as Bajaj Finance, DMI Finance and Cholmandalam finance for consumer products, which can increase the chances of recovery. According to the Credit Bureau CRIF Himark, loans below Rs 100,000 are at greater risk than default.