Lending service providers may have to provide digital view of all offers: RBI
The Reserve Bank of India (RBI) is considering new rules for digital lending, aiming to enhance transparency. The proposed guidelines would require lending service providers (LSPs) to digitally share all available loan offers from willing lenders with borrowers. This move aims to empower borrowers by providing a clear view of their loan options, including details like lender names, loan amounts, interest rates, and key terms. The RBI also emphasizes the need for unbiased content, prohibiting LSPs from favoring any particular lender.
The Reserve Bank of India () Friday proposed asking (LSP) to share information in digital form about all the available to the borrower from all the willing lenders with whom they have lending arrangements.The banking regulator proposes this in a draft guideline on ' - in aggregation of loan products from multiple lenders.'
The RBI draft stated, "The LSP shall provide a digital view of all the loan offers available to the borrower, as per his/her requirements, from all the willing lenders with whom the LSP has arrangements with."
The RBI move follows an observation that many LSPs offer aggregation services for loan products, wherein an LSP, or a (RE) acting as an LSP.
RBI observed that many (LSPs) connect borrowers with multiple lenders, but the borrower might not know which lender they're matched with upfront.
The draft suggested that the digital view must include the name(s) of the RE(s) extending the loan offer, the amount and tenor of the loan, the annual percentage rate () , and other key terms. This should enable the borrower to make a fair comparison amomg various offers. The regulator stated that a link to the (KFS) shall also be provided in respect of each of the REs. The RBI also stated that LSP should display unbiased content and shall not directly/indirectly promote or push a product of a particular RE.
Source: Stocks-Markets-Economic Times
