{"id":7404,"date":"2022-09-13T13:36:21","date_gmt":"2022-09-13T13:36:21","guid":{"rendered":"https:\/\/signdesk.com\/in\/?p=7404"},"modified":"2025-09-17T07:30:04","modified_gmt":"2025-09-17T13:00:04","slug":"rbi-digital-lending-guidelines-2022-explained","status":"publish","type":"post","link":"https:\/\/melento.ai\/en-in\/blog\/rbi-digital-lending-guidelines-2022-explained","title":{"rendered":"RBI Digital Lending Guidelines 2022 – Explained"},"content":{"rendered":"

\"RBI<\/p>\n

Introduction<\/b><\/span><\/h2>\n

Digital lending has taken off in a big way in India, with digital loans making up more than 55% of total loans disbursed by private sector banks in 2020 and over 52% of loans provided by NBFCs in 2021.<\/p>\n

Despite this general uptick, lax customer protection and data privacy regulations have left a shroud over digital lending. To clear up these ambiguities and increase overall customer trust, the Reserve Bank of India (RBI) has released a series of Digital Lending Guidelines to be followed by all commercial & co-operative banks and NBFCs with immediate effect, i.e September 2, 2022.<\/p>\n

These guidelines are applicable from the date of the circular to all fresh loans for both new and existing customers. Existing digital loans must be brought under this purview by November 30, 2022.<\/p>\n

The digital lending guidelines lay out new custom protection regulations which include new disclosures to be made to the borrower, such as the Annual Percentage Rate (APR), and digitally signed<\/a><\/strong><\/span> copies of documents such as the Key Facts Statement (KFS), sanction letter, terms and conditions, and more.\u00a0<\/span><\/p>\n

Additionally, the guidelines mandate stringent new protocols for customer data collection, consent, processing, and storage; and formalize channels for grievance redressal.<\/p>\n

RBI Tightens Up Customer Protection Protocols<\/b><\/span><\/h2>\n

Banks and NBFCs must ensure that all money that flows between the borrower and the financial institution (FI) must occur along a single channel, i.e from the borrower\u2019s account to the FI or from the FI\u2019s account to the borrower\u2019s.<\/p>\n

This means that no loan-related capital can be transmitted through third-party accounts, except in the case of co-lending.<\/p>\n

FIs must also make sure that any fees or charges are paid directly to them and not charged by their fintech partners to the borrowers. Any penal charges must be based on the outstanding loan amount.<\/p>\n

With respect to new disclosures, the Digital Lending Guidelines 2022<\/a><\/strong><\/span> lay out a number of instructions.\u00a0<\/span><\/p>\n