RBI’s Digital Lending Guidelines: Key takeaways for consumers and the way forward | The Financial Express

RBI’s Digital Lending Guidelines: Key takeaways for consumers and the way forward

The RBI has recently ordained that the lending business must comprehensively clarify the scope and responsibilities across the lending lifecycle.

RBI’s Digital Lending Guidelines: Key takeaways for consumers and the way forward
RBI's new digital lending guidelines has come as part of a proactive response to the rising number of cases where customers fell prey to unjust interest rates and harrowing tactics employed by unfounded fintech firms.

By Rohit Garg, CEO & Co-Founder, SmartCoin

The new digital lending guidelines from the Reserve Bank of India (RBI) has come as part of a proactive response to the rising number of cases where customers fell prey to unjust interest rates and harrowing tactics employed by unfounded fintech firms. Countering future impact of the unchecked fintech uprising, the RBI has issued a comprehensive set of guidelines, with implications across diverse aspects, including lending processes, disclosures, technology and data gathering, among others while enabling the crediting of digital loans directly into a customer’s bank account and not via any third party.

To safeguard the interests of borrowers and improve consumer trust in the digital lending ecosystem, the Reserve Bank of India has recently ordained that the lending business must comprehensively clarify the scope and responsibilities across the lending lifecycle.

Considering how certain fintech companies store for longer durations and leverage customer data, borrowers should be able to withdraw their consent at any point in time. Secure, inclusive and quality digital lending is the need of the hour, especially following the pandemic. The RBI’s guidelines will help protect customers and ensure that all unregulated and non-credible companies are held accountable.

Digital adoption will continue to enable lenders to remit credits instantly, offer comprehensive financial services, enhance loan recovery through engagement and rewards, as well as maintain transparency in operations. App-based microlending platforms will stand to gain increased consumer trust and boost industry expansion in a structured fashion.

A level playing field is essential to guaranteeing both consumer protection and fair competition. All parties seeking to innovate and compete in the FinTech space, including established banks, fintech start-ups, and BigTech companies, should be subject to the same regulatory requirements and oversight. These initiatives focus on strengthening market integrity and consumer protection.

Get live Share Market updates and latest India News and business news on Financial Express. Download Financial Express App for latest business news.

First published on: 29-11-2022 at 10:52:25 pm
Photos
12 Photos
First look! This is how the new Parliament will look from inside – Check latest PHOTOS
7 Photos
Republic Day 2023 parade rehearsals continue at full swing in Kartavya Path; See PHOTOS
5 Photos
CYCLONE – I: India, Egypt special forces hold joint exercise in Jaisalmer – Photos