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ARTICLE · 19 JUNE 2023

Guidelines On Default Loss Guarantee In Digital Lending

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As an update, the Reserve Bank of India ("RBI") has notified the attached 'Guidelines on Default Loss Guarantee in Digital Lending' ("DLG Guidelines") on June 8, 2023 (with effect from the date of the notification)...

IndiaTechnology
Ankit Guha
Ankit Guha
Pragnya Shabareesh
Pragnya Shabareesh
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As an update, the Reserve Bank of India ("RBI") has notified the attached 'Guidelines on Default Loss Guarantee in Digital Lending' ("DLG Guidelines") on June 8, 2023 (with effect from the date of the notification), which is a much-awaited development post the restrictions imposed on first loss default guarantee (FLDG) arrangements between entities undertaking digital lending as stipulated under the Guidelines on Digital Lending dated 2 September 2022 ("Digital Lending Guidelines"). The DLG Guidelines are applicable to arrangements between Regulated Entities ("Res") and Lending Service Providers ("LSPs") or between two REs involving DLG. The definition of RE's and LSPs is as set out in the Digital Lending Guidelines.

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