Can your EMI phone get locked? RBI might just say yes

Imagine missing an EMI payment and waking up to find your phone locked. No calls, no WhatsApp, not even UPI. Sounds dramatic? That’s exactly what could happen if the Reserve Bank of India (RBI) approves a new proposal under study.

According to reports, the RBI is exploring whether lenders should be allowed to remotely block smartphones bought on EMI if buyers default on payments.

With almost 70% of Indian smartphone purchases happening on installments, the central bank is looking for ways to curb rising loan defaults.

This isn’t a new idea

If this feels familiar, that’s because it’s happened before. Several fintechs and digital lending apps previously locked devices of defaulters without warning. But RBI cracked down on the practice, asking companies to stop due to ethical and data security concerns.

Now, with the market so reliant on credit, the regulator is weighing whether a regulated version of this could work.

Big questions about data privacy

The proposal might sound like a strong barrier to missed payments, but it raises some serious privacy issues. If lenders get the ability to lock your phone, what happens to your personal data, photos, and messages?

Who takes responsibility if a device is blocked by mistake or sensitive data is misused? These are the questions RBI is reportedly evaluating as part of its study.

Not a rule yet

For now, nothing changes. RBI has not implemented any such rule and is still studying the operational, legal and ethical consequences before making a decision.

But the debate has already started online, with some calling it a smart move to protect lenders and others warning it could be a privacy nightmare.

The bottom line

Until there is an official confirmation, everything will remain normal. Keep your EMIs up to date, be aware of your rights, and watch this space. Because if RBI does go ahead, this could change the way we think about buying phones on credit in India.