India's vibrant digital lending sector has grown at an
unprecedented rate, increasing from USD9 billion in 2009 to USD110
billion a decade later. Participants in the industry include banks
and financial institutions regulated by the Reserve Bank of India
(RBI), as well as a large number of loan service providers (LSPs),
technology vendors, and businesses offering digital lending apps
(DLAs) outside the RBI's regulatory ambit.
The lack of regulatory scrutiny has ensured that this growth has
attracted controversy, especially over privacy, with allegations of
multiple security incidents, misuse of data and unethical recovery
practices plaguing unregulated players. Given the inadequate and
antiquated general data protection law, the RBI issued Guidelines
on Digital Lending (guidelines) on 2 September 2022 that, among
other aspects, create a comprehensive framework to protect
consumers' data within the industry. The guidelines bring
unregulated digital lending players
