RBI Plan to Let Lenders Remotely Lock Phones on Defaulted Loans
Why in the news
In September 2025 the RBI was reported to be planning a rule letting lenders disable financed phones after default, to curb bad small-ticket loans.
Key facts
- Who: banks and NBFCs.
- Effect: collateral-like security without physical repossession, aiding recovery and reducing NPAs.
Linked frameworks
- Fair Practices Code for Lenders: transparency, consent, grievance redressal.
- NPA Classification and Provisioning Master Directions.
- Digital Lending Guidelines 2023: device-based locking with data privacy protection.
- Secured lending norms under the RBI Act, 1934.
About NPAs
An NPA earns the lender nothing because the borrower has stopped paying. RBI applies the tag once dues stay overdue beyond 90 days, for banks, NBFCs and other lenders.
| Type | Meaning |
|---|---|
| Substandard | Overdue up to 12 months |
| Doubtful | Overdue beyond 12 months, high loss risk |
| Loss | Considered unrecoverable |
Special Mention Accounts
| Category | Days overdue | Signal |
|---|---|---|
| SMA-0 | 1-30 | Minor delay |
| SMA-1 | 31-60 | Early stress |
| SMA-2 | 61-90 | Serious stress |
| SMA-3 | 91+ | Default, NPA |
Exam angle
- NPA threshold: over 90 days.
- Substandard to doubtful cut-off: 12 months.