Guidelines on Digital Lending in India

What is Digital Lending?

Digital Lending as defined by RBI (Reserve Bank of India) means “A remote and automated lending process, largely by use of seamless digital technologies for customer acquisition, credit assessment, loan approval, disbursement, recovery, and associated customer service.”

Digital lending Apps/ Platforms include not only mobile but also web-based applications that have a user interface that will facilitate digital lending services. Such platforms will include applications of the Regulated Entities(REs) as well as the ones being operated by Lending Service Providers(LSPs).

A few of the prominent digital leading platforms are Pine Labs, MobiKwik and Paytm. 

A Lending Service Provider is an agent of the Regulated Entity who carries out various functions in customer acquisition, pricing support, monitoring, etc with extant outsourcing guidelines issued by the Reserve Bank.

Privacy Policy:

The Reserve Bank of India has laid down certain guidelines pertaining to Consumer Protection for providing fully secure transactions over digital media. All the details related to product information and details related to the Recovery Agent who is authorised to approach the borrower in case of recovery shall be communicated by the Regulated Entity at the time of sanctioning the loan.

REs shall ensure that the digitally signed copies of documents, a summary of loan product, sanction letter, terms and conditions, etc which will be required for the smooth functioning of the loan transactions online.


It is applicable to All Commercial Banks, Primary(Urban) Co-operative Banks, State Co-operative Banks, District Central Co-operative Banks, and also Non-Banking Financial Companies which also include Housing Finance Companies.

Other Legalities relating to Digital Lending:

There are statutes applicable like the NBFC Act, and Consumer Protection Act that provides detailed information as to the laws governing the Digital Lending platforms in India which ought to be referred to and ensured that all the necessities are taken into consideration. 


The content of this article is intended to provide general guidance on the subject matter. Specialist advice should be sought about your specific circumstances.

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