NCLAT: Consideration of Debt Restructuring by Lenders Doesn’t Bar Member from Initiating Proceedings  ||  Delhi High Court: In Matters of Medical Evaluation, Courts Should Exercise Restraint  ||  Delhi HC: Any Person in India Has Right to Legally Import Goods from Abroad and Sell the Same  ||  Delhi HC: Waiver to Section 12(5) of Arbitration Act to be Given Once Tribunal is Constituted  ||  Supreme Court Has Asked States to Regularise Existing Court Managers  ||  SC: Union & States to Create Special POSCO Courts on Top Priority  ||  SC Upholds Authority of CERC to Award Compensation for Delays  ||  SC: Arbitral Tribunal Has Discretion to Include in Sum Awarded, Interest at Rate as it Deems Reasonab  ||  SC: Cannot Use Article 142 to Frame Guidelines on Judicial Recusal  ||  SC: Satisfaction Recorder in One EP Won’t Affect Subsequent EPs for Future Breaches    

Reserve Bank of India releases regulatory framework for digital lending - (10 Aug 2022)

Banking

A regulatory framework to support orderly growth of credit delivery through digital lending methods while mitigating the regulatory concerns has been issued by RBI. This regulatory framework is based on the principle that lending business can be carried out only by entities that are either regulated by the Reserve Bank. The Reserve Bank’s regulatory framework is focused on the digital lending ecosystem of RBI’s Regulated Entities (REs) and the Lending Service Providers (LSPs) engaged by them to extend various permissible credit facilitation services.

The universe of digital lenders is classified into three groups –

Entities regulated by the RBI and permitted to carry out lending business;

Entities authorized to carry out lending as per other statutory/regulatory provisions but not regulated by RBI;

Entities lending outside the purview of any statutory/regulatory provisions.

All loan disbursals and repayments are required to be executed only between the bank accounts of borrower and the RE without any pass-through/ pool account of the LSP or any third party. Any fees, charges, etc., payable to LSPs in the credit intermediation process shall be paid directly by RE and not by the borrower. A standardized Key Fact Statement (KFS) must be provided to the borrower before executing the loan contract. All-inclusive cost of digital loans in the form of Annual Percentage Rate (APR) is required to be disclosed to the borrowers. APR shall also form part of KFS. Automatic increase in credit limit without explicit consent of borrower is prohibited. Data collected by DLAs should be need based, should have clear audit trails and should be only done with prior explicit consent of the borrower.

Tags : FRAMEWORK   DIGITAL LENDING   RELEASE  

Share :        

Disclaimer | Copyright 2025 - All Rights Reserved