Regulated entities (REs), including banks and other lenders, will have time till November 30 to transition existing customer accounts to the new digital lending guidelines, the Reserve Bank of India (RBI) said on Friday.
The central bank clarified through a notification that the new norms, released through a circular dated August 10, will be applicable to existing customers availing fresh loans and to new customers getting on-boarded from the date of the circular.
“However, in order to ensure a smooth transition, REs shall be given time till November 30, 2022, to put in place adequate systems and processes to ensure that ‘existing digital loans’ (sanctioned as on the date of the circular) are also in compliance with these guidelines in both letter and spirit,” the RBI said.
The regulator reiterated that outsourcing arrangements entered into by REs with a lending service provider (LSP) or digital lending app (DLA) do not diminish the REs’ obligations and they shall continue to conform to existing guidelines on outsourcing.
It directed these entities to ensure that the LSPs engaged by them and the DLAs comply with the guidelines.
The August 10 guidelines require REs to ensure that all loan servicing and repayments are executed by the borrower directly into the RE’s bank account without any pass-through account or pool account of a third party. REs will also have to ensure that no disbursals are made to a third-party account, including the accounts of LSPs and their DLAs. FE
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Das: Our focus will be to minimise growth sacrifice
Mumbai: The RBI will focus on minimising the growth sacrifice resulting from the tightening of monetary policy, Governor Shaktikanta Das said on Friday.
In an interview with a business channel, he said, “Our focus will be to minimise the growth sacrifice. Under the present circumstances, global factors will be responsible to a greater extent in the context of both inflation and growth.” He added that while there is a view that advanced economies may go into a recession, the situation will have to be watched, for now. At the same time, a global slowdown will hit India as exports play an important role in India’s growth. FE