The issuance of RBI’s new norms is a crucial development in improving the digital lending regulation bid and is a welcome step towards ensuring fairness and transparency in the entire digital lending ecosystem. Some of the changes proposed by RBI include:
i. All loan disbursals and repayments would now be required to be undertaken only between the borrower’s bank accounts and the Regulated Entity (RE).
ii. All charges payable to the Loan Service Providers (LSP) in the credit intermediation process shall be paid directly by RE and not by the borrower, and all-inclusive cost of digital loans as an Annual Percentage Rate (APR) needs to be disclosed upfront by REs. This will result in more transparency of charges and rates of loans being taken by the customer.
iii. Tightened consumer data privacy with the lenders getting access to only some mobile applications as a one-time access in order to facilitate KYC process while mandating them to have distinctive mention of privacy policies on their website.
Legitimate players, like us, have already been adhering to these guidelines and would continue to refine the operations further to strengthen our existing transparent and fair practices and customer trust in the digital lending ecosystem to ensure a healthy and sustained growth of the sector.