{"id":1301059,"date":"2025-10-05T08:10:20","date_gmt":"2025-10-05T02:40:20","guid":{"rendered":"https:\/\/trak.in\/stories\/?p=1301059"},"modified":"2025-10-05T08:11:01","modified_gmt":"2025-10-05T02:41:01","slug":"lenders-in-india-will-be-provided-special-powers-to-recover-small-loans","status":"publish","type":"post","link":"https:\/\/trak.in\/stories\/lenders-in-india-will-be-provided-special-powers-to-recover-small-loans\/","title":{"rendered":"Lenders In India Will Be Provided Special Powers To Recover Small Loans"},"content":{"rendered":"\n<p>India\u2019s central bank is preparing a policy that will allow lenders to <strong>remotely lock smartphones purchased on credit<\/strong> if borrowers fail to repay their loans. The move comes as part of the Reserve Bank of India\u2019s (RBI) plan to strengthen loan recovery mechanisms in the rapidly growing consumer durable financing market, where <strong>over one-third of electronics, including phones, are bought on credit<\/strong>.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"576\" src=\"https:\/\/trak.in\/stories\/wp-content\/uploads\/2025\/10\/Rs2000-Notes-Opt-1-2-1280x720-1-1024x576-1-1280x720-1-1024x576.jpeg\" alt=\"Lenders In India Will Be Provided Special Powers To Recover Small Loans\" class=\"wp-image-1301068\" srcset=\"https:\/\/trak.in\/stories\/wp-content\/uploads\/2025\/10\/Rs2000-Notes-Opt-1-2-1280x720-1-1024x576-1-1280x720-1-1024x576.jpeg 1024w, https:\/\/trak.in\/stories\/wp-content\/uploads\/2025\/10\/Rs2000-Notes-Opt-1-2-1280x720-1-1024x576-1-1280x720-1-300x169.jpeg 300w, https:\/\/trak.in\/stories\/wp-content\/uploads\/2025\/10\/Rs2000-Notes-Opt-1-2-1280x720-1-1024x576-1-1280x720-1-768x432.jpeg 768w, https:\/\/trak.in\/stories\/wp-content\/uploads\/2025\/10\/Rs2000-Notes-Opt-1-2-1280x720-1-1024x576-1-1280x720-1.jpeg 1280w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\">Balancing Recovery With Consumer Protection<\/h3>\n\n\n\n<p>The RBI had previously halted phone-locking practices by lenders due to privacy and <a href=\"https:\/\/www.reuters.com\/world\/india\/india-central-bank-plans-give-lenders-key-power-recover-small-loans-sources-say-2025-09-11\/\">misuse concerns.<\/a> Now, after consultations, it is set to update its <strong>Fair Practices Code<\/strong> to include strict guidelines. Lenders will need <strong>prior consent from borrowers<\/strong> before activating locking features and will be prohibited from accessing any <strong>personal data<\/strong> on locked devices.<\/p>\n\n\n\n<p>\u201cThe RBI wants to ensure lenders can recover small-ticket loans while safeguarding consumer data,\u201d a source familiar with the policy said.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Boon for Lenders, Potential Blow for Consumers<\/h3>\n\n\n\n<p>If approved, the new rule could significantly benefit major non-bank lenders such as <strong>Bajaj Finance, DMI Finance, and Cholamandalam Finance<\/strong>, which dominate the small-ticket consumer finance market. Loans under \u20b91 lakh are considered the most vulnerable to default, with high delinquency rates, according to CRIF Highmark.<\/p>\n\n\n\n<p>However, consumer rights groups warn of <strong>serious risks<\/strong>. \u201cThis practice weaponizes access to essential technology to enforce compliance, potentially locking users out of livelihoods, education, and financial services,\u201d said Srikanth L., founder of advocacy group CashlessConsumer.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">A Growing Market and Rising Risk<\/h3>\n\n\n\n<p>India\u2019s mobile market is massive \u2014 with <strong>over 1.16 billion connections<\/strong> \u2014 and small-ticket personal loans now account for nearly <strong>one-third of all non-food credit<\/strong>. As loans for electronic goods surge, ensuring repayment has become critical for financial stability.<\/p>\n\n\n\n<p>Yet, critics argue that making smartphones \u2014 essential tools for communication, learning, and earning \u2014 contingent on loan repayment crosses ethical lines. They call for <strong>clear consent protocols, grievance redressal mechanisms, and strict oversight<\/strong> to prevent abuse.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">The Road Ahead<\/h3>\n\n\n\n<p>The RBI\u2019s final guidelines are expected in the coming months. While the move could improve loan recovery rates and lending confidence, it also raises pressing questions about <strong>consumer rights, digital access, and financial fairness<\/strong> in one of the world\u2019s fastest-growing credit markets.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>India\u2019s central bank is preparing a policy that will allow lenders to remotely lock smartphones purchased on credit if borrowers fail to repay their loans. The move comes as part of the Reserve Bank of India\u2019s (RBI) plan to strengthen loan recovery mechanisms in the rapidly growing consumer durable financing market, where over one-third of [&hellip;]<\/p>\n","protected":false},"author":30,"featured_media":1301068,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21],"tags":[5231],"class_list":["post-1301059","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-lenders"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.9 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Lenders In India Will Be Provided Special Powers To Recover Small Loans - Trak.in - Indian Business of Tech, Mobile &amp; Startups<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/trak.in\/stories\/lenders-in-india-will-be-provided-special-powers-to-recover-small-loans\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Lenders In India Will Be Provided Special Powers To Recover Small Loans - Trak.in - Indian Business of Tech, Mobile &amp; Startups\" \/>\n<meta property=\"og:description\" content=\"India\u2019s central bank is preparing a policy that will allow lenders to remotely lock smartphones purchased on credit if borrowers fail to repay their loans. 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