Can Your Phone Be Locked If You Miss An EMI? Can Your Phone Be Locked If You Miss An EMI? Not only homes or cars, but today’s generation is buying smartphones on EMI, and this practice has become common nowadays. However, another practice, linked to it, has also become very common, which is that lenders remotely lock smartphones when the borrowers do not pay or miss repayments. But what steps is the Reserve Bank of India (RBI) taking regarding this issue?
The Reserve Bank of India (RBI) has now stepped in and taken necessary actions over the growing practice. The bank regulator has recently issued brief rules on when financial institutions can remotely block financed smartphones or other financed devices, what services must continue after locking the device and compensation to borrowers if banks fail to restore services after EMI is cleared.
RBI’s new rules came into effect on January 1, 2027 and they are part of its directions to banks on recovery of loans and engagement of recovery agents.
According to RBI, several banks and other financial institutions use tech tools to remotely lock smartphones when borrowers miss loan payments.
Accepting that banks have a legitimate right to recover dues, RBI has ensured that such technology does not become a tool for harassment and violent recovery.
The answer is No, the bank regulator has clarified that remote restriction technology can only be used when the loan has been taken specifically to finance the smartphone.
In simple words, if an individual has taken any kind of loan but not directly linked to purchasing a smartphone or other device, the bank cannot remotely disable the device as part of the recovery process.
According to RBI, the lenders cannot remotely restrict a financed device immediately after an EMI is missed.
The restrictions on financed smartphones can start after the loan account remains overdue for at least 30 days.
Even then, the bank regulator allows the banks to adopt a phased approach rather than completely disabling the device.
A complete restriction can be imposed by the banks only after EMI remains pending for two months. Even after the restrictions were imposed, the bank regulator instructed banks to completely block the device.
RBI Mandates Banks To Keep Essential Services Active Even During Remote Device Locking
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