In pursuance of the announcement made in the Statement on Developmental and Regulatory Policies dated December 08, 2023 regarding issuance of a regulatory framework for aggregation of loan products by lending service providers (LSPs), the Reserve Bank of India has placed on its website the Draft Circular on ‘Digital Lending – Transparency in Aggregation of Loan Products from Multiple Lenders’.
Comments/ feedback, if any, may be sent by e-mail with the subject line “Comments on Draft Circular on Digital Lending – Transparency in Aggregation of Loan Products from Multiple Lenders”, by May 31, 2024.
The draft circular mandates REs to ensure as under:
- 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.
- While the LSP may adopt any mechanism to ascertain the willingness of the lenders to offer a loan, it shall follow a consistent approach in this regard, which shall be disclosed suitably on their website.
- The digital view shall include the name(s) of the RE(s) extending the loan offer, amount and tenor of loan, the Annual Percentage Rate (APR)1 and other key terms and conditions in a way which enables the borrower to make a fair comparison between various offers. A link to the key facts statement (KFS)2 shall also be provided in respect of each of the REs.
- The content displayed by the LSP shall be unbiased and shall not directly/indirectly promote or push a product of a particular RE, including by use of any practices or deceptive patterns, i.e., using ‘dark patterns’3 designed to mislead borrowers into choosing a particular loan offer.
