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ARTICLE · 11 AUGUST 2020

Digital Lending Platforms To Face Stricter Norms

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RBI releases direction that impose conditions to Banks and NBFCs lending through digital lending platforms

IndiaFinance and Banking
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RBI releases direction that impose conditions to Banks and NBFCs lending through digital lending platforms

The Reserve Bank of India ("RBI") through a notification dated June 24, 2020, has imposed several conditions on scheduled commercial banks and NBFCs who lend through digital lending platform. The notification was issued in light of several complaints that were received from individuals against digital lending platforms pertaining to exorbitant interest rates, harsh recovery methods, unauthorised use of personal data and non-transparent method of calculating interest rates.

Further, it was observed by the RBI that several digital lending platforms have been portraying themselves as lenders without disclosing the name of the NBFCs or scheduled banks they have partnered with, as a result of this, customers have not been able to access the grievance redressal mechanism available under the RBI framework.

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