Overview

• Reuters-based reports say the RBI is preparing to update its Fair Practices Code within months to permit controlled phone locking for EMI defaulters.
• Proposed safeguards include explicit prior consent from borrowers and a ban on lenders accessing personal data on locked devices.
• This would reverse the central bank’s 2023–2024 instruction that lenders stop using loan‑linked apps to disable phones of defaulting customers.
• NBFCs, which provide about 85% of consumer durable loans—such as Bajaj Finance, DMI Finance and Cholamandalam Finance—are viewed as likely beneficiaries through improved recoveries.
• Industry data cited in reports note high delinquency in loans under Rs 1 lakh and widespread financing of electronics, while consumer advocates warn the measure could restrict access to essential digital services; the RBI has not officially commented.