RBI Mandates Transparency in Digital Lending Sector Regulations – Money Advice Experts in Services

The Reserve Bank of India (RBI) has introduced new guidelines under the Reserve Bank of India (Digital Lending) Directions, 2025 to enhance transparency and accountability in the rapidly expanding digital lending sector. These rules necessitate all regulated entities (REs) to disclose details of their digital lending apps (DLAs) on the RBI’s Centralised Information Management System (CIMS) portal, which will become operational on May 13. REs have until June 15 to submit the initial data.

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One of the key highlights of the RBI’s directive is the centralised reporting of DLAs. This move aims to establish a public directory of DLAs to help users verify the authenticity of digital lending apps associated with RBI-regulated lenders. The RBI will publish this directory on its website by July 1, reflecting the data uploaded by REs on the CIMS portal.

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In addition to the public directory, the new regulations emphasize providing borrowers with a transparent view of loan offers when dealing with multiple lending service providers (LSPs). Borrowers must be presented with all available loan options, including the names of unmatched lenders, ensuring greater transparency in the loan aggregation process.

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Furthermore, the RBI has imposed stricter due diligence requirements on REs before engaging with third-party partners like LSPs. These entities must evaluate the technical capabilities, data privacy protocols, and storage security of their partners to safeguard borrower interests and maintain industry integrity.

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The implementation of these rules is crucial as the digital lending landscape has witnessed exponential growth, accompanied by concerns such as hidden fees, aggressive debt recovery practices, and the proliferation of unreliable apps. By enforcing uniform standards and enhancing borrower protection measures, the RBI aims to address these issues and promote a more secure lending environment.

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Looking ahead, REs are urged to promptly report their DLAs to the RBI, enabling borrowers to verify the legitimacy of lending apps. LSPs, on the other hand, are expected to revamp their interfaces in compliance with the new loan aggregation display norms to align with regulatory requirements and ensure a seamless user experience.

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As the digital lending sector continues to evolve, regulatory interventions like these play a vital role in fostering trust and stability within the industry. By setting clear guidelines and promoting transparency, the RBI’s latest directives are poised to shape the future of digital lending in India, prioritizing consumer welfare and industry sustainability.

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