Supreme Court: Vacancies From Resignations under CUSAT Act Must Follow Communal Rotation  ||  Supreme Court: Forest Land Cannot Be Leased or Used For Agriculture Without Centre’s Approval  ||  Supreme Court: Gravity of Offence and Accused’s Role Must Guide Suspension of Sentence under CrPC  ||  Supreme Court: Arbitral Awards Cannot be Set Aside For Mere Legal Errors or Misreading of Evidence  ||  SC Acknowledges Child Trafficking as a Grave Reality and Issues Guidelines to Assess Victim Evidence  ||  Allahabad HC: When Parties Extend an Agreement by Conduct, The Arbitration Clause Extends Too  ||  Supreme Court: Issues of Party Capacity and Maintainability Must Be Decided by Arbitral Tribunal  ||  Supreme Court: Omissions in Chief Examination Can Be Rectified During Cross-Examination  ||  Supreme Court: Items Given by Accused to Police Are Not Section 27 Recoveries under Evidence Act  ||  Gujarat High Court: Waqf Institutions Must Pay Court Fees When Filing Disputes in State Tribunal    

Guidelines on Default Loss Guarantee (DLG) in Digital Lending- (Reserve Bank of India) (08 Jun 2023)

MANU/RMIC/0066/2023

Banking

1. A reference is invited to Para (3.4.3.1) of Section C of Annex-II to the RBI Press Release "Recommendations of the Working group on Digital Lending - Implementation" dated August 10, 2022 in terms of which it was stated that the recommendation pertaining to First Loss Default Guarantee (FLDG) was under examination with the Reserve Bank.

2. Arrangements between Regulated Entities (REs) and Lending Service Providers (LSPs) or between two REs involving default loss guarantee (DLG), commonly known as FLDG, has since been examined by the Bank and it has been decided to permit such arrangements subject to the guidelines laid down in the Annex to this circular. DLG arrangements conforming to these guidelines shall not be treated as 'synthetic securitisation'1 and/or shall also not attract the provisions of 'loan participation'2.

3. The guidelines shall come into effect from the date of this Circular.

4. These directions are issued under sections 21, 35A and 56 of the Banking Regulation Act, 1949, sections 45JA, 45L and 45M of the Reserve Bank of India Act, 1934, section 30A of the National Housing Bank Act, 1987 and section 6 of the Factoring Regulation Act.

Tags : GUIDELINES   DLG   DIGITAL LENDING  

Share :        

Disclaimer | Copyright 2025 - All Rights Reserved