RBI’s new digital lending norms apply from today

New Delhi, November 30

The Reserve Bank’s modified guidelines on digital lending that seek to protect customers from exorbitant interest rates by certain entities and also check unethical loan recovery practices will come into effect from Thursday.

Under the new norms, all loan disbursals and repayments are required to be executed only between the bank accounts of borrower and the regulated entities (like banks and NBFCs) without any pass-through/pool account of the Lending Service Providers (LSPs).

Also, “any fees, charges, etc, payable to LSPs in the credit intermediation process shall be paid directly by regulated entities and not by the borrower”, the Reserve Bank said in a press release while conveying the regulatory stance. V Swaminathan, Executive Chairman of Andromeda Loans, said since digital loans and online repayments had gained more prominence post-pandemic, the need of the hour was competent systems and processes that would further strengthen data privacy and security of confidential information shared between customers and regulated entities.