The Reserve Bank of India (RBI) is developing a new rule aimed at empowering lenders. Under this new regulation, lenders will be able to remotely lock the phones of individuals who fail to repay their loans. This initiative is designed to give lenders greater control, but it also raises concerns about consumer rights.
A 2024 study by Home Credit Finance revealed that over a third of consumers purchase consumer electronics, such as mobile phones, on loan. According to telecom regulators, India, with a population exceeding 1.4 billion, has over 1.16 billion mobile connections.
The RBI aims to ensure that lenders can recover loan amounts by locking phones, while also safeguarding customer data. The Economic Times reports that the RBI spokesperson has not yet commented on the matter. If implemented, this rule could benefit companies providing loans for consumer products, such as Bajaj Finance, DMI Finance, and Cholamandalam Finance, by increasing their chances of recovery. According to credit bureau CRIF High Mark, loans below Rs 100,000 are inherently riskier.
