RBI’s Digital Lending Directions 2025

On 8th May 2025, the Reserve Bank of India (RBI) issued the Digital Lending Directions, 2025 to enhance transparency, accountability, and consumer protection within India's fast-growing digital lending sector.

  • These guidelines set out clear operational standards, borrower disclosure norms, due diligence requirements, grievance redressal processes, data protection rules, and regulations around Default Loss Guarantee (DLG) arrangements.

Rationale

  • The exponential rise in digital lending has raised concerns about consumer rights, data privacy, transparency, and the role of unregulated entities.
  • Reports of excessive interest rates, aggressive recovery tactics, and misuse of personal data highlighted the urgent need for a strong regulatory framework.
  • These ....
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