Digital Lending

Analysis of RBI Co-Lending Arrangements Directions, 2025

Summary: The Reserve Bank of India (RBI) has issued the Co-Lending Arrangements Directions, 2025, establishing a comprehensive regulatory framework for co-lending partnerships between regulated entities (REs). This framework significantly expands the scope beyond priority sector lending to cover all lending activities, while introducing key operational requirements, including a minimum 10% retention by each RE, mandatory transfer within 15 calendar days, blended interest rate calculations, and enhanced disclosure norms. The directions also introduce provisions for Default Loss Guarantee (DLG) up to 5% and unified borrower-level asset classification across partner REs, marking a substantial evolution from the previous 2020 framework.Continue Reading Analysis of RBI Co-Lending Arrangements Directions, 2025

FIG Paper (No. 44 - Series 3): RBI Consolidates Directions on Digital Lending: Implications for REs & LSPs

Background:

The Reserve Bank of India (“RBI”) on May 8, 2025, issued the Reserve Bank of India (Digital Lending) Directions, 2025 (“DL Directions”).

The idea of these new directions was to consolidate the various directions and circulars on digital lending by Regulated Entities (“RE”), previously issued by the RBI[1], provide greater clarity on consumer/ customer centric rights from a customer protection point of view and create a repository with the RBI of all digital lending apps/ platforms (“DLA”) provided by REs/ lending service providers (“LSP”).Continue Reading FIG Paper (No. 44 – Series 3): RBI Consolidates Directions on Digital Lending: Implications for REs & LSPs

FIG Paper

Background:

A Working Group on Digital Lending (“RBI WG”), constituted by the Reserve Bank of India (“RBI”), had published its Report in November 2021. It had made recommendations on (i) the legal and regulatory framework for digital lending; (ii) technology; and (iii) financial consumer protection, implementable over the near-term (up to one year) and medium-term (beyond one year).Continue Reading FIG Paper (No. 16 – Series 1) – Impact Analysis of RBI’s Recommendations of the Working Group on Digital Lending – Implementation

RBI Working Group on Digital Lending – Policy Suggestions

The Reserve Bank of India (“RBI”), through a press release issued on January 13, 2021, has set up a working group on digital lending (“WG”), to study all aspects of digital lending activities in the regulated financial sector as well as by unregulated players so that an appropriate regulatory approach can be put in place.

The move is well-timed, given the recent turmoil witnessed in the Indian digital lending space, and comes on the back of the RBI’s December 23, 2020, public caution against unauthorised digital lending platforms/ mobile Apps and its June 24, 2020, Circular, prescribing Fair Practices Code for banks and non-banking finance companies (“NBFCs”) while sourcing loans or recovering dues through digital lending platforms.
Continue Reading FIG Papers (No. 1) : RBI Working Group on Digital Lending – Policy Suggestions