The pace at which digital lending is growing, it is no surprise
that the number of lenders has increased manifold in the last few
years. The overall volume of disbursement through digital mode
exhibited a growth of more than twelvefold between 2017 and 2020
(from ₹11,671 crore to ₹1,41,821 crore). Generally,
banks and NBFCs operate with a Lending Service Provider
(“LSP”) who provides a lending
platform and carries out certain functions on behalf of the
lender's such as customer acquisition, underwriting support,
pricing support, servicing, monitoring, and recovery of loans.
Digital lending involves providing and recovering loans through
their LSP via mobile and web-based applications which are known as
Digital Lending Apps/Platforms
(“DLAs”). With the growth in digital
lending, came an increase in the malpractices by lenders leading to
an urgent need for regulation. Lenders through digital platforms
collect a variety of data from the borrowers including
