The Reserve Bank of India (RBI) on Wednesday issued guidelines to tighten the use of digital lending platforms by banks and NBFCs for extending loans. The regulator has now mandated that digital lending platforms need to disclose upfront the names of banks and NBFCs they have engaged at the back-end.The RBI stated that outsourcing any activity by banks and non-banks does not diminish their obligations and the onus of compliance with regulatory instructions rests solely on them.
“Banks and NBFCs, irrespective of whether they lend through their own digital lending platform or through an outsourced lending platform, must adhere to the Fair Practices Code guidelines in letter and spirit,” the RBI said.
The regulator has directed that names of all digital lending platforms engaged as agents be now disclosed on the websites of banks and non-bank lenders. It has also mandated that digital lending platforms engaged as agents of mainstream banks and NBFCs disclose the name of the lender on whose behalf they are engaging with the customer.
ET in its edition on June 3, had reported how several digital lenders had allegedly taken to cyber-bullying to name and shame borrowers. They were also accused of using fake legal notices and making repeated ‘harassment’ calls to family members of their borrowers to recover dues.