Missed a phone EMI? RBI may lock your device remotely
03 Oct 2025

The Reserve Bank of India (RBI) is mulling a new rule that could let banks remotely lock mobile phones bought on Equated Monthly Installments (EMIs).

The proposed measure, first reported by Reuters, is aimed at tackling the growing problem of bad loans in India's booming consumer finance sector.

If approved, it would change how consumer electronics loans are managed in the country.

Proposed change to Fair Practices Code
Proposal details

The RBI is said to be considering revising its Fair Practices Code in the coming months.

The proposed change would let lenders, including banks and non-banking finance companies, use a remote locking feature on mobile phones bought on credit.

This means that if a borrower misses an EMI payment, the lender could remotely lock their device.

Addressing rising NPAs in consumer finance
Policy rationale

The RBI's proposed framework is primarily aimed at tackling the rising number of non-performing assets in the consumer loan segment.

India's consumer loan market has grown rapidly in recent years, but so have defaults, especially on small-ticket loans under ₹1 lakh.

A 2024 study by Home Credit Finance found a spike in EMI-based electronics purchases, which are particularly susceptible to missed payments.

Privacy concerns and technical guidelines
Implementation strategy

The RBI plans to amend its Fair Practices Code and issue new guidelines on how the technical phone-locking process should work.

To protect borrowers' privacy and data, it is likely that the central bank will make it mandatory for lenders to take prior consent from customers before enabling this option.

Notably, banks and finance companies won't be able to access any personal data on these phones.

Impact on consumers and advocacy groups' opposition
Potential effects

If implemented, the RBI's policy could affect millions of Indians who rely on EMIs to buy mobile phones and other electronic devices.

India currently has over 1.16 billion mobile connections, with users relying on smartphones for work, education, and financial access.

However, consumer advocacy groups are strongly opposing this move as they believe it could unfairly punish borrowers who depend on these devices for their livelihoods.