Miss EMI Payments? Your Mobile Phone Could Be Remotely Locked, Here’s What You Should Know
By Business Desk,News18,Shilpy Bisht
Copyright news18
Banks may soon be able to remotely lock mobile phones purchased on EMIs if customers default on payments. The Reserve Bank of India (RBI) is reportedly reviewing this proposal. If implemented, it could mean trouble for defaulters, as unpaid devices could be disabled digitally.
Currently, lenders can repossess vehicles or homes if loans default for over a month. Reports suggest that in 2024, nearly one-third of consumer electronics purchases in India were made through small loans. This raises questions about how defaults could be managed going forward.
The main goal of the proposal is to reduce bad debt. However, it requires balancing two sensitive concerns — protecting customer privacy and safeguarding lender interests. This would need a secure technical framework to allow mobile phones to be locked remotely without compromising data security.
Governor Sanjay Malhotra confirmed that the Reserve Bank is studying the proposal. He stressed the need to protect consumers’ privacy rights while ensuring that lenders’ interests are also preserved in such a system.
For this to work, the RBI may need to amend its ‘Fair Practices Code’. Phones should be lockable remotely only if the borrower has given clear prior consent. During the lock process, lenders must not have access to personal data stored on the device.
Deputy Governor M. Rajeshwar Rao highlighted that the system must strike a balance between customer rights, data privacy requirements, and creditor needs. He stressed that protecting consumer interests should remain the top priority.
Banks see this approach as a way to control defaults, especially for small loans tied to consumer electronics like mobile phones. As defaults rise, lenders are increasingly pushing for such measures as a practical solution.
While remote phone locking could pressure defaulters to pay on time, it raises important ethical and privacy concerns. Mobile phones are essential for education, work, healthcare, and emergencies. Critics also question whether giving lenders remote-lock rights could infringe on individual freedom and privacy.
