7 min read |
RBI has done what many regulators rarely do-simplify.
In a bold and much-needed move, the Reserve Bank of India has unified its fragmented digital lending regulations into a single, comprehensive document: the Digital Lending Guidelines 2025 (DLG 2025).
Gone are the multiple PDFs, FAQ patches, and annexures from 2022–2024. This is the master rulebook.
For digital lenders, NBFCs, and LSPs (Lending Service Providers), this isn’t just regulatory hygiene-it’s a business model blueprint.
Who’s In? Everyone.
The DLG doesn’t leave much room for ambiguity. RBI’s definitions are catch-all:
- Regulated Entities (REs) – Banks, NBFCs, HFCs, co-ops, and any institution under financial regulation.
- LSPs – Any third party handling sourcing, pricing, underwriting, or servicing.
- DLAs (Digital Lending Apps) – Any borrower-facing interface, including your in-house app.
- DLS (Digital Lending System) – Encompasses emerging setups like PAs entering credit.
Revolving credit (credit cards, credit-on-UPI) is excluded-but almost everything else is in.
Marketplace Lending? Show All Your Cards
If you run a multi-lender platform, you must now:
- Display all matched and unmatched loan offers.
- Clearly list lender name, loan amount, APR, tenure, repayment, and penal charges.
- Rank offers using a transparent scoring logic (e.g., lowest APR, longest tenure).
- Avoid UI “dark patterns” like fake scarcity, hidden fees, or pre-ticked insurance boxes.
For LSPs and aggregators, this changes the UX game. The buyer journey just got longer-but also more trustworthy.
No More Detours: Money Flow Must Be Direct
RBI has banned indirect fund flows via LSPs or nodal accounts (except in cases like point-of-sale loans).
- Loan disbursals and repayments must go directly between lender and borrower.
- First Loss Guarantees (FLG) are capped at 5%, and must be pooled, ring-fenced, and capital-adjusted on NBFC books.
If you’re still routing through LSP escrow for convenience, it’s time to re-architect.
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Cooling-Off Period: 24 Hours, No Exceptions
Borrowers now get a minimum one-day cooling-off period to cancel the loan without penalty.
Yes-even for loans disbursed within 24 hours. Lenders can allow more, but not less.
Data Consent: Clear, Reversible, Auditable
RBI has tightened its stance on data access:
- Only “need-based” data can be collected
- No access to contacts, media, file storage
- Servers must be located in India
- Borrowers must be able to revoke consent and demand data deletion
This makes privacy an operational feature, not a disclaimer buried in your T&Cs.
KFS is King: Standardised Loan Disclosures are Now Non-Negotiable
Every offer must be accompanied by a Key Fact Statement (KFS) that includes:
- All-inclusive APR
- Processing fees
- Cooling-off rights
- Recovery process details
No more hiding costs behind “flat rates.” RBI wants full-stack clarity-especially since short-tenure loans can push APRs into triple digits.
The Rise of the Chief Compliance Officer
REs must designate a Chief Compliance Officer (CCO) to:
- Certify every DLA/LSP on RBI’s SIMS portal
- Ensure timely monthly reports
- Maintain real-time oversight of data policies, grievance redressal, and offer logic
For many NBFCs, this means investing in robust compliance infrastructure. For LSPs, it means tighter onboarding and operational scrutiny.
FLG: New Rules for Old Guarantees
While FLG itself isn’t new, the way it’s handled has changed:
- 5% FLG cap still holds
- Must be clearly mapped to a specific loan pool
- NBFC capital must be adjusted accordingly
- FLG deposits must be identifiable and non-mingled
RBI is signalling: guarantees should mitigate risk, not inflate leverage.
What It Means for Lenders
Change | Why It Matters | What You Can Do |
Multi-lender transparency | Impacts conversion flows | Redesign UI with compliant ranking engine |
FLG tracking & capital deduction | Hits NBFC capital adequacy | Tag FLG pools with tighter reconciliation |
Data storage & revocation | Increases infra cost | Automate consent logging & deletion protocols |
SIMS reporting & CCO certification | Adds monthly compliance load | Centralise partner management & reporting stack |
Symbo’s Take
The guidelines mark a turning point for digital lenders, pushing them to upgrade not just systems, but the mindset behind how lending journeys are built.
At Symbo, we’re helping partners integrate RBI & IRDAI compliant insurance covers that shield the borrower, protect the lender, and unlock revenue along the way.
Want to build a smarter, regulation-ready credit flow?
Let’s talk.
