The Reserve Bank of India on Wednesday (May 20) said lenders are prohibited from completely blocking or disabling mobile phones due to non-payment of loans taken to buy the device. Under its draft amendment guidelines, the regulator of the banking sector stated that banks are permitted to take certain steps to restrict certain functionalities of mobile phones if the loan dues are not paid. However, completely disabling or blocking the phone is prohibited. The regulator noted that the rules are applicable only to loans specifically used for mobile phone purchases and not to any other form of borrowing. A 2024 study by Home Credit Finance indicated that buying a phone on loan has become a trend, with more than 1.16 billion mobile connections in India, as per the telecom regulator. Currently, Phones have become essential tools for people in terms of communication, work, and education across the country.&nbsp;Also read: <a href="https://www.wionews.com/business-economy/gold-loans-jump-over-50-yoy-emerge-as-india-s-fastest-growing-retail-credit-segment-crif-1779282417852">Gold loans jump over 50% YoY, emerge as India’s fastest-growing retail credit segment: CRIF</a><h3>RBI barred from accessing personal data</h3>Earlier in 2024, the Reserve Bank of India had directed lenders to stop locking the phones of borrowers who defaulted on repayments. The practice involved installing an application at the time of loan disbursal that could remotely lock the device in case of non-payment. According to sources, the updated guidelines will require lenders to secure prior consent from borrowers before enabling any phone-locking mechanism. They will also be barred from accessing personal data stored on the device. Data from CRIF High Mark showed that loans below Rs 1 lakh carry a higher risk of default. Non-banking lenders account for nearly 85 per cent of consumer durable financing in India, while personal loans now make up almost one-third of the banking system’s total non-food credit, with loans for electronic devices witnessing rapid growth.

Under its draft amendment guidelines, the regulator of the banking sector stated that banks are permitted to take certain steps to restrict certain functionalities of mobile phones if the loan dues are not paid. 

The Reserve Bank of India on Wednesday (May 20) said lenders are prohibited from completely blocking or disabling mobile phones due to non-payment of loans taken to buy the device. Under its draft amendment guidelines, the regulator of the banking sector stated that banks are permitted to take certain steps to restrict certain functionalities of mobile phones if the loan dues are not paid. However, completely disabling or blocking the phone is prohibited. The regulator noted that the rules are applicable only to loans specifically used for mobile phone purchases and not to any other form of borrowing. A 2024 study by Home Credit Finance indicated that buying a phone on loan has become a trend, with more than 1.16 billion mobile connections in India, as per the telecom regulator. Currently, Phones have become essential tools for people in terms of communication, work, and education across the country. Also read: Gold loans jump over 50% YoY, emerge as India’s fastest-growing retail credit segment: CRIF RBI barred from accessing personal data Earlier in 2024, the Reserve Bank of India had directed lenders to stop locking the phones of borrowers who defaulted on repayments. The practice involved installing an application at the time of loan disbursal that could remotely lock the device in case of non-payment. According to sources, the updated guidelines will require lenders to secure prior consent from borrowers before enabling any phone-locking mechanism. They will also be barred from accessing personal data stored on the device. Data from CRIF High Mark showed that loans below Rs 1 lakh carry a higher risk of default. Non-banking lenders account for nearly 85 per cent of consumer durable financing in India, while personal loans now make up almost one-third of the banking system’s total non-food credit, with loans for electronic devices witnessing rapid growth.

Under its draft amendment guidelines, the regulator of the banking sector stated that banks are permitted to take certain steps to restrict certain functionalities of mobile phones if the loan dues are not paid.&nbsp;

Banks cannot completely block, disable phones for unpaid loans, clarifies RBI

ICICI Bank Ltd, India's third-largest lender by assets, said its fourth-quarter net profit almost halved, missing expectations, as provisions for bad loans surged.

Gross bad loans as a percentage of total loans stood at 8.84 per cent at the end of March compared with 7.82 per cent at the end of the previous quarter and 7.89 per cent a year earlier.

Net profit for the three months to March 31 fell to 10.20 billion rupees on Monday.&nbsp;&nbsp;

That compared with the average 10.77 billion rupees forecast of 12 analysts, according to Thomson Reuters data.

Net interest income for the quarter was up 1 per cent on the year to 60.22 billion rupees, while net interest margin was at 3.24 per cent.

Shares of the Mumbai-based lender, which started trading in 1998, ended 2.5 per cent higher ahead of the results, outperforming a slightly higher main market.&nbsp;

The results come against the backdrop of a series of allegations of impropriety in ICICI Bank's extending loans to some companies and enjoying reciprocal benefits by the family members of the bank's CEO Chanda Kochhar.&nbsp;

Gross bad loans as a percentage of total loans stood at 8.84 per cent at the end of March compared with 7.82 per cent at the end of the previous quarter and 7.89 per cent a year earlier

ICICI Bank Ltd, India's third-largest lender by assets, said its fourth-quarter net profit almost halved, missing expectations, as provisions for bad loans surged. Gross bad loans as a percentage of total loans stood at 8.84 per cent at the end of March compared with 7.82 per cent at the end of the previous quarter and 7.89 per cent a year earlier. Net profit for the three months to March 31 fell to 10.20 billion rupees on Monday. That compared with the average 10.77 billion rupees forecast of 12 analysts, according to Thomson Reuters data. Net interest income for the quarter was up 1 per cent on the year to 60.22 billion rupees, while net interest margin was at 3.24 per cent. Shares of the Mumbai-based lender, which started trading in 1998, ended 2.5 per cent higher ahead of the results, outperforming a slightly higher main market. The results come against the backdrop of a series of allegations of impropriety in ICICI Bank's extending loans to some companies and enjoying reciprocal benefits by the family members of the bank's CEO Chanda Kochhar.

ICICI Bank's Q4 profit drops by close to half as bad loans rise

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Banks cannot completely block, disable phones for unpaid loans, clarifies RBI

ICICI Bank's Q4 profit drops by close to half as bad loans rise