The Reserve Bank of India (RBI) has formed a working group on digital lending, which includes lending through mobile apps and internet platforms, according to the government. Finance Minister Nirmala Sitharaman stated in a written response to the Lok Sabha that the regulatory guidelines on digital lending released by the RBI are intended to improve consumer protection and provide a secure environment for the digital lending sector.
According to her, the recommendations require regulated institutions (REs), such as banks and NBFC, to make sure that the digital lending apps and lending service providers they work with adhere to the rules. According to the criteria, the loan service provider is not allowed to collect any fees or charges the borrower; instead, the REs they work with must pay the fees directly.
The Minister went on to say that the government’s goal is to restrict bogus lending apps, and that it is in constant communication with the RBI and other relevant regulators. The goal is to continue being proactive, to constantly monitor and maintain cyber security readiness, and to respond appropriately and promptly to address any such weaknesses in the Indian financial system.