Definition
Digital Lending Guidelines
RBI's Digital Lending Guidelines are rules that govern app- and platform-based lending in India to ensure transparency, fair practices and protection of borrowers' data.
The Digital Lending Guidelines require that loans be disbursed directly into and repaid from the borrower's bank account, that all fees be disclosed upfront via a Key Fact Statement, and that the regulated entity (bank or NBFC) — not an unregulated app — be clearly identified as the lender.
The rules curb harmful practices: lending service providers cannot increase credit limits without consent, must follow a cooling-off period for exit, and can collect only need-based data with the borrower's permission. Recovery practices must be fair.
The framework targets illegal loan apps and predatory lending, pushing the digital lending ecosystem toward transparency and accountability for borrowers.
Related terms
- Buy Now Pay Later (BNPL)Buy Now Pay Later is a short-term financing option at checkout that lets you receive goods immediately and pay later, either in one deferred payment or in instalments.
- P2P LendingPeer-to-peer lending is an RBI-regulated model where individuals lend directly to other individuals through an NBFC-P2P platform, which matches lenders and borrowers.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.