The central bank last month issued digital lending norms, under which the disbursal of loans and collection of repayments must be executed only between borrowers and entities it regulates, with no third party involved in this process. The direction was part of the first set of operational guidelines it issued for banks and non-bank lenders that have digital lending apps, to bring such services under tighter supervision.
The Reserve Bank of India (RBI) on Friday (September 2) directed all regulated entities to put in place adequate systems and processes by November 30 to ensure that all existing digital loans are in compliance with the recently-issued digital lending guidelines. According to the RBI, the decision was taken to ensure a smooth transition to the new regime.
“In order to ensure a smooth transition, REs (regulated entities) shall be given time till November 30, 2022, to put in place adequate systems and processes to ensure that ‘existing digital loans’ (sanctioned as on the date of the circular) are also in compliance with these guidelines in both letter and spirit,” the central bank said in a statement.
The directions in the circular will be applicable to both existing customers availing fresh loans and to new customers onboarded by digital lending platforms from September 2, it said. The central bank also put the onus on regulated entities to ensure adherence to rules by its outsourcing partners.
