RBI Notifies the RBI (Digital Lending) Directions, 2025

The Reserve Bank of India (RBI) has recently issued RBI (Digital Lending) Directions, 2025 vide notification dated May 08, 2025 (DL Directions) which consolidate the earlier instructions including the guidelines on digital lending dated September 02, 2022 and guidelines on default loss guarantee in digital lending dated June 08, 2023. Additionally, certain new measures for inter alia arrangements involving lending service providers, creation of directory of digital lending apps, etc., have been introduced pursuant to the DL Directions.

The DL Directions shall come into force immediately except for Paragraph 6 of the DL Directions (relating to RE-LSP arrangements involving multiple lenders) which shall come into effect from November 1, 2025, and Paragraph 17 of the DL Directions (relating to reporting of Digital Lending Applications (DLAs) to RBI), which shall come into effect from June 15, 2025.

The new aspects introduced under the DL Directions, include inter alia the following:

• RE-LSP arrangements involving multiple lenders

In cases where a Lending Service Provider (LSP) has agreements with multiple Regulated Entities (REs) for digital lending, each RE shall inter alia ensure the following:

• Lending Service Provider (LSP) shall provide a digital view of all the loan offers matching the borrower’s request on the DLA which meets the requirement of the borrower. The name of the unmatched lenders shall also be disclosed in the digital view.
• While the LSP may adopt any mechanism to match the request of borrowers with the lender (s) to offer a loan, it shall follow a consistent approach for similarly placed borrowers and products. The mechanism adopted by the LSP and any subsequent changes to this mechanism shall be properly documented.
• The digital view of loan offers from matching lenders shall include the name (s) of the RE (s) extending the loan offer, amount and tenor of loan, Annual Percentage Rate (APR), monthly repayment obligation and penal charges (if applicable), in a way which enables the borrower to make a fair comparison between various offers. A link to the Key Facts Statement (KFS) shall also be provided in respect of each of the RE.
• The content displayed by the LSP shall be unbiased, objective and shall not directly/ indirectly promote or push a product of a particular RE, including the use of dark patterns/deceptive patterns designed to mislead borrowers into choosing a particular loan offer. However, ranking of loan offers based on a publicly pre-disclosed metric for such ranking shall not be construed as promoting a particular product.

• Reporting of credit information and DLAs: The key aspects include inter alia the following:

• RE shall report all DLAs deployed/ joined by them, whether their own or those of the LSPs, either exclusively or as a platform participant, on the Centralised Information Management System (CIMS) portal of RBI in the requisite format as given in annex-I to the DL Directions.
• RE shall update the aforesaid list as and when additional DLA (s) are deployed or the engagement with the existing DLA (s) ceases to exist by filing the updated data in the CIMS portal.
• The Chief Compliance Officer of the RE or any other official designated by the Board of the RE for the purpose shall certify that the data on DLAs submitted by them on the CIMS portal is correct and the DLAs are compliant with all the extant regulatory instructions, including the provisions of the DL Directions, as updated from time to time.
• RE shall ensure the correctness and timeliness of information regarding DLAs, as the data, as submitted by the RE on CIMS, shall be published on the website of RBI in an automated manner and RBI shall not verify/ validate the data submitted on CIMS. All issues and grievances of customers concerning DLAs shall be addressed and dealt with by the RE directly.

For more details, kindly refer to the DL Directions notified by the RBI, available by clicking on this link.