RBI Digital Lending Guidelines: Safeguards Borrower Data Security

lines: Safeguards BorrowerThe Reserve Bank of India ("RBI") released its guidelines on Digital Lending on September 02, 2022 ("Guidelines") for immediate implementation from such date.¹ The Guidelines are applicable to existing customers availing fresh loans as well as any new customers getting onboarded from the date of the circular. A transition period, till November 30, 2022, has been provided, to regulated entities ("REs") to institute adequate systems and processes to ensure that existing digital loans (sanctioned as on the date of the circular) are also in compliance with the Guidelines.

Digital lending, as defined under the Guidelines, is a remote and automated lending process, administered largely by the use of seamless digital technologies for customer acquisition, credit assessment, loan approval, disbursement, recovery, and associated customer service. Digital lending involves not only traditional banks but also FinTech entities such as Lending Service