RBI Digital Lending Guidelines: What a Lending App Must Do

The rules use three terms that decide who is responsible for what.

The borrower must see the full cost before accepting, and must know who the lender is.

Loans must be disbursed directly into the borrower's bank account, and repayments must go directly into the RE's account. Funds cannot pass through an LSP's account or a pool account. Fees to the LSP are paid by the RE, not charged to the borrower. Limited exceptions exist, such as disbursals covered by specific statutory or regulatory mandates, co-lending flows and loans for a specified end use where money goes to the end beneficiary.

If the money touches the LSP's account on the way, the product design is wrong.

Borrowers get a cooling-off period to exit the loan by repaying principal and the proportionate annual percentage rate, with no penalty. The period is set by the lender's board, cannot be less than one day and has to be disclosed in the key fact statement. A reasonable one-time processing fee may be retained if disclosed. In the app this needs a visible exit option and a calculation of the amount due.

Data collection has to be need-based, with explicit consent and an audit trail.

Where an LSP works with several lenders, the app must show the borrower a digital view of all the loan offers matching the request from the lenders it has arrangements with, including each lender's name, amount, tenor, annual percentage rate, repayment terms and a link to the key fact statement. It must also name the lenders whose offers did not match. The display has to be unbiased: no dark patterns that push one lender.

Three further requirements affect operations.