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ARTICLE · 06 JUNE 2025

Digital Lending 2.0? Breaking Down The RBI Digital Lending Directions, 2025

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On May 8, 2025, the Reserve Bank of India ("RBI") issued the Reserve Bank of India (Digital Lending) Directions, 20251 ("DL Directions") marking a significant step in formalising and strengthening the regulatory framework for digital lending in India.

IndiaFinance and Banking
Shreya Suri
Shreya Suri
Naqeeb Ahmed
Naqeeb Ahmed
Srika Agarwal
Srika Agarwal
Anushka Narayan
Anushka Narayan
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1. BACKGROUND

On May 8, 2025, the Reserve Bank of India ("RBI") issued the Reserve Bank of India (Digital Lending) Directions, 20251 ("DL Directions") marking a significant step in formalising and strengthening the regulatory framework for digital lending in India. The DL Directions consolidate earlier guidelines on digital lending and introduce new measures to address emerging risks in the digital lending ecosystem and enhance consumer protection.

Prior to the DL Directions, the regulatory framework for digital lending in India was primarily shaped by the Guidelines on Digital Lending, 20222 ("DL Guidelines"),3 read with the Guidelines on Default Loss Guarantee (DLG) in Digital Lending, 20234 ("DLG Guidelines")5 along with the corresponding FAQs for both.6

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