RBI proposes draft guidelines for web aggregators of loan products

RBI draft regulations: Reserve Bank of India (RBI), has unveiled draft guidelines aimed at establishing a regulatory framework for web aggregators of loan products. move is intended to enhance transparency and provide borrowers with prior information about potential lenders.

Under proposed framework, lending service providers (LSPs) - entities engaged by banks or non-banking finance companies (NBFCs) to perform various functions such as customer acquisition, underwriting, and loan recovery on digital platforms - will be subject to regulatory oversight.

Key provisions of draft guidelines include ensuring that LSPs offer a comprehensive digital view of all loan offers available to borrowers from lenders y have arrangements with. This view should include essential details such as lender's name, loan amount and tenor, annual percentage rate, and or terms and conditions to facilitate fair comparisons between different offers.

While LSPs are given flexibility in determining lenders' willingness to offer loans, RBI emphasizes importance of opting a consistent approach, which must be transparently disclosed on ir websites. ditionally, LSPs are required to provide a link to key facts statement (KFS) for each regulated entity.

Importantly, content displayed by LSPs must be unbiased and should not favour or promote any specific lender's products. RBI prohibits use of deceptive practices or patterns aimed at misleing borrowers into selecting a particular loan offer.

Stakeholders have been invited to provide feedback on draft circular, with comments accepted until May 31.

proposed guidelines signify RBI's commitment to fostering transparency and consumer protection in lending ecosystem, ensuring that borrowers have access to clear and accurate information when making financial decisions.

(With Reuters inputs)