RBI report urges new nodal agency, SRO, law to ban illegal digital lending

Says balance sheet lending through DLAs should be restricted to entities regulated by RBI or entities registered under any other law for specifically undertaking lending business

The report by a working group formed by the Reserve Bank of India (RBI) on digital lending, including lending through apps and digital platforms, has recommended setting up of a nodal agency which will verify the technological credentials of the digital lending apps. It has also called for the creation of a self-regulatory organization, and bringing in legislation to prevent illegal lending activities.

“A nodal agency should be set up which will primarily verify the technological credentials of digital lending apps (DLAs) of the balance sheet lenders and loan service providers (LSPs) operating in the digital lending ecosystem”, the working group