RBI is considering allowing lenders to remotely lock smartphones purchased on credit when borrowers default on EMIs, aiming to curb bad debt while igniting concerns over consumer rights and digital access harms .
What’s proposed
Reuters reporting indicates RBI may amend its Fair Practices Code to explicitly permit device locking for loan recovery on financed phones, reversing a 2023 direction that told lenders to stop using locking apps on defaulters’ devices.
The proposed framework would mandate explicit borrower consent before any locking mechanism is enabled, and expressly prohibit lenders from accessing or altering personal data on the device, positioning the tool as a narrow recovery control rather than a surveillance vector. A cited source frames the intent as balancing “power to recover small-ticket loans” with protection of customer data under the updated ruleset .
Why now […]
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