CURRENT AFFAIRS

Detailed explanation-1: -RBI has issued guidelines for digital lending apps. As per the guidelines issued by the central bank, the aim is to protect borrowers from unscrupulous lending practices. Under the new instructions issued by the Central bank, the regulated entities cannot store borrowers’ data except for some basic minimal information.

Detailed explanation-2: -Under the new norms, all loan disbursals and repayments are required to be executed only between the bank accounts of borrower and the regulated entities (like banks and NBFCs) without any pass-through/ pool account of the Lending Service Providers (LSPs).

Detailed explanation-3: -Released in August 2022, RBI’s digital lending guidelines sought to crack down on the predatory digital lending practices prevalent across the country. The guidelines sought to protect customers from exorbitant interest rates charged by digital lenders and prevent unethical loan recovery practices.

Detailed explanation-4: -The RBI stated in a detailed set of guidelines for digital lending that the main concerns were unbridled engagement of third parties, mis-selling, breach of data privacy, unfair business practices, charging exorbitant interest rates, and unethical recovery practices.

Detailed explanation-5: -ICICI Bank has launched a new digital-lending platform called ‘iLens’, which is developed by Tata Consultancy Services (TCS). iLens digitises the entire lending process for borrowers, from loan application to credit disbursement.