RBI proposes norms for aggregators of loan products

FALAKNAAZ SYED

Mumbai, April 26

The Reserve Bank of India (RBI) on Friday said that lending service providers (LSPs), acting as agents of banks, should provide a digital view of all the loan offers available with them to the borrower to help them make an informed decision.

The central bank said that it has observed that many of the LSPs offer aggregation services for loan products where they have outsourcing arrangements with several lenders and the Digital Lending App Platform (DLA) of the LSP/lender matches the borrower to one of the Lenders. In such cases, particularly where an LSP has arrangements with multiple lenders,the identity of the potential lender to the borrower may not be known upfront to the borrower.

In the draft guidelines on ‘Digital Lending-Transparency in aggregation of Loan Products from Multiple Lenders’ the central bank said that the digital view shall include the name(s) of the lender extending the loan offer, amount and tenor of loan, the Annual Percentage Rate (APR) and other key terms and conditions in a way which enables the borrower to make a fair comparison between various offers. A link to the key facts statement (KFS) shall also be provided in respect of each of the lenders.

“While the LSP may adopt any mechanism to ascertain the willingness of the lenders to offer a loan, it shall follow a consistent approach in this regard, which shall be disclosed suitably on their website,” said the RBI.

The guidelines also stated that the content displayed by the LSP shall be unbiased and shall not directly/indirectly promote or push a product of a particular RE, including by use of any practices or deceptive patterns, i.e., using ‘dark patterns’ designed to mislead borrowers into choosing a particular loan offer.