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101 search results for: digital lending

12

Lending Service Providers for digital lenders: Distinguishing agency contracts and principal-to-principal contracts

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– Neha Sinha, Assistant Legal Advisor | finserv@vinodkothari.com Introduction Lending Service Providers (LSPs) are engaged by the Regulated Entities (REs) (banks or NBFCs) to carry out some functions of RE in connection with lenders’ functions  on digital platforms. These LSPs may be engaged in customer acquisition, underwriting support, recovery of loan, etc. As the LSPs […]

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Digital Consumer Lending: Need for prudential measures and addressing consumer protection

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-Siddarth Goel (finserv@vinodkothari.com) Introduction “If it looks like a duck, swims like a duck, and quacks like a duck, then it probably is a duck” The above phrase is the popular duck test which implies abductive reasoning to identify an unknown subject by observing its habitual characteristics. The idea of using this duck test phraseology […]

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Extension of FPC on lending through digital platforms

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A new requirement or reiteration by the RBI? – Anita Baid (finserv@vinodkothari.com) Ever since its evolution, the basic need for fintech entities has been the use of electronic platforms for entering into financial transactions. The financial sector has already witnessed a shift from transactions involving huge amount of paper-work to paperless transactions[1]. With the digitalization […]

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Identifying the Contours of a Lending Marketplace

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Aditya Iyer l finserv@vinodkothari.com Background The concept of a marketplace, i.e a platform where buyers and sellers meet, appears to have existed since antiquity and is one of the defining features of evolved commerce in any particular civilization (e.g the Middle Eastern and Persian ‘Bazaar’, the Ancient Greek ‘Agora’, the Silk Road, ‘Mandis’ in India, […]

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Fair Lending: RBI bars several practices

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Lenders asked to mend ways immediately Team Finserv | finserv@vinodkothari.com Introduction If fairness lies in the eyes of the beholder, the RBI’s eye is getting increasingly customer-centric. This fiscal year, the RBI has issued circulars aimed at fostering fairness and transparency in lending practices; these come at the backdrop of circulars last year on penal […]

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Allow borrowers to make free choice: RBI draft rules for digital loan aggregators

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Manisha Ghosh l manisha.ghosh@vinodkothari.com In a move aimed at fostering transparency and consumer-centric practices in digital lending, the Reserve Bank of India (RBI) issued draft guidelines for digital loan aggregators on 26th April, 2024  titled ‘Digital Lending – Transparency in Aggregation of Loan Products from Multiple Lenders’. Comments are due on the same.  This regulatory […]

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Choppy landing for soft lending: Regulatory concerns on quality of lending

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– Vinod Kothari, finserv@vinodkothari.com Some of the RBI’s recent stringent actions, with stop-business directions, raise an alarm amongst financial sector entities. Are these concerns limited to a particular type of lending, or can they lead to any general observations on the quality of lending? One shouldn’t be tunnel-visioned and believe that these regulatory objections are […]