The Reserve Bank of India (RBI) on April 26 sought public comments on draft circular on ‘Digital Lending – Transparency in Aggregation of Loan Products from Multiple Lenders’.
The RBI said it has observed that many loan service providers offer aggregation services for loan products where the identity of the potential lender to the borrower may not be known upfront to the borrower.
In the drfat circular, the RBI said the loan service providers need to provide a digital view of all the loan offers available to the borrower, as per the customer's requirements from all the willing lenders with whom the LSP has arrangements with.
Also, while the loan service providers 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 their website, the RBI said.
The digital view shall include the name of the banks extending the loan offer, amount and tenor of loan, the Annual Percentage Rate and other key terms and conditions in a way which enables the borrower to make a fair comparison between various offers, the RBI said.
A link to the key facts statement (KFS) shall also be provided in respect of each of the banks, the RBI said.
Also. the content displayed by the loan service providers need to be unbiased and shall not directly or indirectly promote or push a product of a particular bank, including by use of any practices or deceptive patterns, the RBI draft circular said.
The central bank said comments can be sent by e-mail by May 31, 2024.
In the statement on developmental and regulatory policies dated December 8, 2023, the RBI had said it will issue a regulatory framework for aggregation of loan products by lending service providers (LSPs).
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