The Reserve Bank of India (RBI) on September 02, 2022, issued an advisory regarding the guidelines on Digital Lending, with reference to the RBI Press Release “Recommendations of the Working Group on Digital Lending – Implementation” dated August 10, 2022.
It is advised that outsourcing arrangements entered by Regulated Entities (REs) with a Lending Service Provider (LSP)/ Digital Lending App (DLA) do not diminish the REs’ obligations and they shall continue to conform to the extant guidelines on outsourcing. The REs is advised to ensure that the LSPs engaged by them and the DLAs comply with the guidelines on Digital Lending issued by the RBI.
Additionally, it is recommended that as of the date of this circular, the directions in this circular will apply to "current customers" who are applying for new loans and "new customers" who are enrolling. However, in order to facilitate a seamless transition, REs will have until November 30, 2022, to put in place the necessary systems and procedures to guarantee that "existing digital loans" (approved as of the date of the circular) also adhere to the word and spirit of these regulations.
In Annexure I the detailed guidelines on Digital lending have been given, which are attached to this circular.
Disclaimer - Kindly refer to the Annexure for a better understanding of the same.
[Notification No. RBI/2022-23/111 DOR.CRE.REC.66/21.07.001/2022-23]
