RBI Draft Guidelines on Digital Lending Transparency in Aggregation of Loan Products from Multiple Lenders

The LSP shall provide a digital view of all the loan offers available to the borrower, as per their requirements, from all the willing lenders with whom the LSP has arrangements with.

RBI Draft Guidelines on Digital Lending Transparency in Aggregation of Loan Products from Multiple Lenders

The central bank has invited the reference to the ‘Guidelines on Digital Lending’ issued vide Circular dated September 02, 2022, and the Statement on Developmental and Regulatory Policies dated December 08, 2023 wherein it was announced to issue a regulatory framework for aggregation of loan products by lending service providers (LSPs).

Accordingly, as per the circular issued, with the objective of enabling the borrowers to have prior information about the potential lenders in order to make an informed decision, the REs are advised to ensure as under:

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The LSP shall provide a digital view of all the loan offers available to the borrower, as per their requirements, from all the willing lenders with whom the LSP has arrangements.

While the LSP may adopt any mechanism to ascertain the willingness of the lenders to offer a loan, it shall follow a consistent approach in this regard, which shall be disclosed suitably on its website.

The digital view shall include the name of the RE(s) extending the loan offer, the amount and tenor of the loan, the Annual Percentage Rate (APR), and other key terms and conditions in a way that enables the borrower to make a fair comparison between various offers. A link to the key facts statement (KFS) shall also be provided in respect of each of the REs.

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The content displayed by the LSP shall be unbiased and shall not directly or indirectly promote or push a product of a particular RE, including by use of any practices or deceptive patterns, i.e., using ‘dark patterns designed to mislead borrowers into choosing a particular loan offer.

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