RBI Bars Lenders From Disabling Phones Over Unpaid Device Loans
RBI's draft amendment prohibits banks and NBFCs from fully blocking or disabling mobile phones financed through device-purchase loans. Lenders may restrict select features but cannot brick the device. The rule reshapes risk models for consumer-electronics financing and could tighten underwriting on smartphone EMI schemes.
RBI clarified in draft amendment that lenders cannot fully block or disable mobile phones if device-purchase loans go unpaid. Banks may restrict certain phone features but not disable them entirely. Rule applies only to mobile-purchase loans, impacting consumer-electronics financing.
Why this matters
RBI's draft rule removes a key recovery tool for device financiers, forcing tighter underwriting on smartphone EMI schemes that have powered India's consumer-electronics retail boom.
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