RBI's Device-Lock Loan Consultation | My Submission Journey Concludes

 Sometimes citizen participation is not about being right. It is about contributing thoughtfully.

Published 01 June 2026

By Nayakanti Prashant
3rd Gen Banker & Citizen Lobbyist – Bengaluru
Advocating Digital Transactions Day (April 11)

 

The consultation window for the Reserve Bank of India's draft directions relating to technology-based restriction of functionalities of financed mobile devices has now concluded, and my submission has been formally shared with RBI.

As a full-time banker and part-time citizen observer, I approached this consultation not from the perspective of a lender, borrower, technology provider or industry participant, but as someone interested in the long-term evolution of India's digital financial ecosystem.

The objective of my representation was not to oppose the proposed framework, nor to advocate for any particular commercial outcome.

Instead, the submission focused on a simple question:

How can technology-enabled recovery mechanisms be implemented in a manner that balances innovation, borrower protection, operational clarity and public confidence?

The observations shared with RBI centred around regulatory clarity, repayment accessibility, transparency, restoration processes and long-term governance considerations.

With the submission process now complete, I hope RBI has received a diverse range of perspectives from financial institutions, technology providers, consumer advocates, borrowers and interested citizens.

Consultations such as these are among the strengths of India's regulatory ecosystem. They create opportunities for ideas to be examined, challenged, refined and, where appropriate, incorporated into future policy.

The sections below provide a summary of the key themes highlighted in my representation.

Executive Summary

The Reserve Bank of India's revised draft directions on technology-based restriction of functionalities of financed mobile devices represent an important milestone in the evolution of India's digital lending ecosystem.

After reviewing the draft framework, I submitted a citizen-observer representation to RBI. My feedback broadly supports the objective of balancing borrower protection, recovery effectiveness, responsible innovation and long-term market development.

Rather than focusing on whether device-restriction mechanisms should exist, my observations focused on how such mechanisms may be implemented in a transparent, customer-centric and operationally sustainable manner.

The key themes highlighted in my submission were:

1. Regulatory Clarity

The draft directions refer to a borrower's mobile device, including mobile phones and tablets.

I suggested that additional clarity around the scope of "mobile devices" may support consistent implementation, reduce ambiguity and facilitate smoother grievance resolution in the future.

2. Recognising a Distinct Lending Category

Technology-enabled device-restriction loans differ from conventional retail loans.

I proposed that RBI may consider creating a separate regulatory category for such products, supported by enhanced disclosures, informed consent standards and customer communication requirements.

Such an approach could also improve supervisory visibility as this segment evolves.

3. Preserving Repayment Accessibility

One of the observations submitted was that a borrower should not lose the ability to digitally cure a digital default.

India's UPI and BBPS infrastructure provides a unique opportunity to ensure that borrowers retain practical access to repayment channels throughout the restriction lifecycle.

4. Transparency and Restoration

The draft directions contain important borrower-protection measures, including restoration timelines and compensation provisions.

My submission suggested that restriction and restoration should be viewed as two parts of the same customer journey, supported by clear communication, auditability and customer visibility of key events.

5. Responsible Innovation and Governance

Technology-assisted recovery mechanisms should complement responsible lending practices, not replace them.

As adoption grows, governance frameworks, complaint monitoring, restoration performance and customer outcomes may become equally important indicators of success.

Closing Note

The draft framework has the potential to create a new category of technology-enabled lending products within India.

Its long-term success may depend not only on the effectiveness of the restriction mechanism itself, but also on the transparency, repayment accessibility, restoration efficiency and governance standards that surround it.

My representation has now been submitted, and I look forward to seeing the collective feedback received by RBI during the consultation process. As always, these observations were shared in the spirit of constructive engagement and responsible innovation within India's digital lending ecosystem.

 

The Joy of Digital Transactions - Nayakanti Prashant

Author’s Blogs

https://prashantrandomthoughts.blogspot.com
https://prashantnepayments.blogspot.com
https://innovationinbanking.blogspot.com

 

I Am Back, NPCI BHIM | Where My Next UPI Journey Begins

 Sometimes the next journey begins with a fresh perspective.

Published 01 June 2026

By Nayakanti Prashant
3rd Gen Banker & Citizen Lobbyist – Bengaluru
Advocating Digital Transactions Day (April 11)

On 1 June 2026, I am making a simple decision.

For my regular digital payments, I am returning to NPCI BHIM.

Not because other UPI apps are bad.

Not because I have a complaint.

Not because I am chasing cashback.

I am returning because I want to experience one of India's most important UPI platforms as an everyday user once again.

Today, after years of using multiple payment applications, I find myself drawn toward a platform that remains closely connected to the institution that built the UPI ecosystem itself.

Three words come to mind:

Simple. Secure. Trusted.

A Platform Worth Revisiting

India's digital payments journey has evolved dramatically over the last decade.

UPI has become part of everyday life.

From neighbourhood stores to large retailers, from utility bills to person-to-person transfers, digital payments are now woven into our daily routines.

The ecosystem continues to evolve with innovations such as:

• Linked Bank Account UPI
• UPI Lite
• Credit Card on UPI
• AutoPay
• Merchant QR Payments
• Delegated Payments

Behind this remarkable transformation stands NPCI, the institution that built and continues to strengthen the UPI infrastructure.

NPCI BHIM may not always dominate conversations, but it remains an important part of India's digital payments story.

My Plan

Over the coming months, I intend to use NPCI BHIM as my primary UPI application across three major payment modes.

Bank Account UPI

The traditional UPI experience.

Direct account-to-account payments through a linked bank account.

Simple and familiar.

UPI Lite

For everyday low-value transactions.

Tea.

Coffee.

Parking.

Small merchant payments.

The transactions that happen quickly and frequently throughout the day.

Credit Card on UPI

One of the most interesting additions to the UPI ecosystem.

The ability to use an eligible RuPay Credit Card through UPI combines the convenience of QR payments with the flexibility of credit.

What Caught My Attention

While exploring the latest NPCI BHIM experience, one feature stood out immediately.

The cashback section.

At first glance, it appears to be a small enhancement.

But I believe it reflects a thoughtful approach to user control.

The application now gives users a choice.

Cashback can either be withdrawn immediately or accumulated within the application and withdrawn later.

The message that caught my attention was simple:

"Keep your bank statements clean."

That sentence stayed with me.

Traditionally, cashback credits can appear as multiple entries in a bank statement.

Over time, they add clutter.

The new NPCI BHIM approach allows cashback to remain accumulated in one place until the user decides to withdraw it.

It is a small feature.

But it introduces flexibility.

And good digital products are often built around meaningful user choices.

Why This Matters

As someone who frequently writes about digital payments and advocates for Digital Transactions Day (April 11), I often think about what makes digital payments enjoyable.

The answer is surprisingly straightforward.

People enjoy digital payments when they feel:

• Safe
• Confident
• In control

Whether it is UPI Lite, Credit Card on UPI, or the redesigned cashback experience, the common theme appears to be user control.

And user control builds trust.

A Personal Journey, Not A Review

This is not a review.

It is not a comparison.

And it is certainly not a farewell to other UPI applications.

India's UPI success story has been built through innovation from many participants across the ecosystem.

My return to NPCI BHIM should simply be viewed as a personal journey.

An opportunity to experience the platform regularly, observe its strengths, understand its evolution, and share those observations along the way.

Looking Ahead

Perhaps I will discover features that I appreciate.

Perhaps I will identify areas where further improvements are possible.

Either way, it promises to be an interesting experience.

For now, the objective is straightforward:

Use NPCI BHIM regularly.

Use UPI Lite.

Use Credit Card on UPI.

Use linked bank account payments.

And experience the platform with fresh eyes.

Closing Thoughts

Sometimes progress is about moving forward.

Sometimes progress is about taking a fresh look at something familiar.

For me, June 2026 begins with a return to one of India's most important digital payment platforms.

Not out of nostalgia.

Not out of criticism.

But out of curiosity, appreciation, and a desire to experience NPCI BHIM with fresh eyes.

I am back, NPCI BHIM.

And I look forward to where this next UPI journey leads.

The Joy of Digital Transactions - Nayakanti Prashant

Author’s Blogs

https://prashantrandomthoughts.blogspot.com
https://prashantnepayments.blogspot.com
https://innovationinbanking.blogspot.com

Market for Indian Mobile Payment Segment - US$350 billion by 2015 - Is your Bank ready to be part of it?

The Interbank Mobile Payment Service(IMPS) launched by National Payments Corporation of India (NPCI) in June 2010, received a boost as Citibank has introduced a new Cash Management Solution, around it.

The solution has been branded as Citi Cash-to-Mobile and it was launched last week, with a pilot in Hyderabad, Andhra Pradesh with the retailer's of Hindustan Coca-Cola Beverages Private Limited (HCCB), the bottling operation of the Coca-Cola Company in India, being the privileged lot.

The aim of this product is to completely automate the Receivables of a corporate, thereby freeing the company resources to concentrate on other activities.

Aimed at Corporate and Institutional clients, this market first solution empowers corporate customers to receive funds from retailers or end customers instantly via mobile.

As a Safe ePayments motivator, this new development is very exciting and the publicity surrounding this launch will now encourage more and more banking consumers, to experience the magic of IMPS.

Mobile Money Identifier (MMID) the  seven digit random number issued by the bank upon registration for IMPS is a necessity for Citi Cash-to-Mobile to succeed.

The Process flow is as under:

01) The corporate opens a Banking Account with Citi and a MMID is issued to it.

02) The MMID is communicated to it’s distributions channel partners.

03) The distribution channel partners MMID’s are obtained and updated in the Bank’s as well as the Corporate’s  Enterprise Resource Planning solution

04) On the payment due date, a SMS is flashed by the corporate, reminding it’s channel partners on the bill amount due.

05) The channel partners transfer the funds via IMPS module.

06) As the channel partners MMID is stored on the  Enterprise Resource Planning solution, the reconciliation is done, and the MIS reports forwarded to all concerned.

06) As IMPS works 24 hours a day, seven days a week, the reconciliation can be done hourly, and the channel distributors be encouraged to remit money any time of the day or night.

07) The common excuse of ‘bank is closed’, will not be a show-stopper for Bill Payments.

Short term impact: -

a) 30 + Banks are on IMPS, but the remaining Banks have to enter the IMPS circuit, as otherwise the corporates might encourage their channel partners to move to banks offering IMPS.

b) Banks have to offer the complete suite of mobile banking services to enable its customers to obtain the full benefits of IMPS.

c) The CASA average balances at the Sending Bank and Receiving Bank, will increase as the Sender’s have to maintain adequate balance to transfer and the Receiver balance will go up correspondingly.

d) Banks too have to move to a 24*7 Core Banking Solution (CBS), as now funds can move in, move out 24*7.

e) The retail customers once are familiar with IMPS, will be encouraged to try out this  channel for other payments/receivables too. This will provide the  much needed jump for IMPS.

Security:

01) The Amount Limits are as under: -

With end to end encryption: A daily cap of Rs. 50,000 per customer per day for both, fund transfer and transactions involving purchase of goods and services

Without end to end encryption: Transactions up to Rs. 5,000 can be facilitated ( RBI Circular Dated May 4, 2011  2011  RBI/2010 RBI/2010--11/511  11/511 DPSS.CO.No.2502  DPSS.CO.No.2502 /02.23.02/  /02.23.02/ 2010 2010--11)

02) The funds cannot be transferred without a MMID.And, a MMID is attached to a Bank Account. Hence the chance of fraud is low.

Thanks to Citi, for being the first bank to introduce a Solution around IMPS. Now, there is no stopping for IMPS.

The possibilities are endless. Which will the next Bank to tap IMPS innovatively?

Let me end today’s Post with a quote : -

"It's easy to come up with new ideas; the hard part is letting go of what worked for you two years ago, but will soon be out of date."

— Roger von Oech