A Reserve Bank of India (RBI) Working Group (WG) on digital lending, including lending through online platforms and mobile apps submitted its recommendations in November this year.
- A separate legislation should be enacted to oversee such lending.
- Setup a nodal agency to vet the Digital Lending Apps.
- A Self-Regulatory Organisation should be set up for participants in the digital lending ecosystem.
- Develop certain baseline technology standards and compliance with those standards as a pre-condition for offering digital lending solutions.
- Disbursement of loans should be made directly into the bank accounts of borrowers and servicing of loans should be done only through the bank accounts of the digital lenders.
- All data collection must require the prior consent of borrowers and come ‘with verifiable audit trails’ and the data itself ought to be stored locally.
- Digital lending has the potential to make access to financial products and services more fair, efficient and inclusive.
- From a peripheral supporting role a few years ago, FinTech-led innovation is now at the core of the design, pricing and delivery of financial products and services.