RBI issues FAQ document on Digital Lending Guidelines

The Reserve Bank of India has rolled out Frequently Asked Question (“FAQ”) document on Guidelines on Digital Lending (please refer to the trailing e-mail for a detailed read) wherein various questions like the ones mentioned below have been clarified:

1. Whether a lending transaction would fall under the definition of digital lending only if all the processes in the life cycle of a loan, viz., customer acquisition, credit assessment, loan approval, disbursement, recovery, and associated customer service, are carried out digitally or some of the aforesaid processes can be carried out in physical mode also?
2. Whether any service provider to whom RE has outsourced some of its credit intermediation activities would fall within the definition of Lending Service Provider (LSP) even if the lending transaction in question does not fall under the definition of ‘Digital Lending’?
3. Whether all LSPs need to appoint Grievance Redressal Officers?
4. Can the services of Payment Aggregators (PA) be used for loan disbursals and repayments?
5. In case of delinquent loans, recovery/ servicing of digital loans may be undertaken by a recovery agent collecting cash from borrowers. Will such cases be exempted from the requirement of direct repayment of loan in the RE’s bank account?

Please refer to the hyperlink below for a detailed read of the FAQ document.

Source: Reserve Bank of India