The Reserve Bank of India (RBI) has introduced a new set of guidelines under its Digital Lending Directions, 2025 aimed at bringing greater transparency, accountability, and consumer protection in the fast-expanding digital lending ecosystem. These changes come amid growing concerns about unauthorised lending apps, hidden charges, and coercive recovery tactics used by some players in the space.

Centralised Reporting Through CIMS Portal

One of the cornerstone changes is the mandatory reporting of Digital Lending Apps (DLAs) to the RBI’s Centralised Information Management System (CIMS). All Regulated Entities (REs) — including banks and NBFCs — must upload comprehensive details of their DLAs by June 15, 2025. The CIMS portal will go live on May 13, giving regulated lenders a little over a month to comply.

This step aims to create a centralised, real-time information system that the regulator and the public can rely upon for verifying the legitimacy of digital lending applications.

Public Directory of Verified Lending Apps

By July 1, the RBI will publish a public-facing directory of all lending apps submitted by REs through the CIMS portal. This initiative is intended to help borrowers verify whether a lending app is associated with an RBI-regulated lender.

⚠️ However, RBI clarified that the list is based on the data submitted by REs and will be displayed on an “as is” basis. RBI will not verify the data independently.

The directory will be updated automatically, reflecting any additions or removals of apps made by the REs, thus ensuring dynamic tracking of approved platforms.

Loan Aggregators Must Provide Transparent Offers

To tackle the issue of lack of clarity in loan aggregators’ platforms, the RBI now requires all Lending Service Providers (LSPs) that work with multiple REs to offer a comparative digital display of available loan offers. This means that a borrower:

• Will receive a complete view of all available loan offers matching their request.

• Will also see the names of REs whose offers didn’t match but are still part of the aggregator's network.

This enhanced transparency allows borrowers to make informed decisions rather than being steered towards a particular lender without alternatives.

Stringent Due Diligence for Third-Party Partners

In an important move, the RBI is asking all REs to conduct comprehensive assessments of LSPs before entering partnerships. This due diligence should cover:

• Technical infrastructure and system reliability

• Data privacy practices and adherence to security standards

• Storage mechanisms and encryption protocols

This ensures that borrowers’ data is safeguarded, and only technically competent and ethical platforms are allowed to operate in the sensitive domain of digital finance.

Why This Move Was Necessary

India’s digital lending sector has grown explosively over the past few years, driven by app-based platforms offering fast, paperless loans. But the growth has been marred by:

• Unregulated or fly-by-night apps with no physical presence or oversight

• Hidden charges and misleading loan terms

• Coercive recovery practices, leading to mental harassment

The RBI's new rules are aimed at cleaning up the space by enforcing uniform disclosure standards, greater visibility for the public, and clear responsibility for lenders and their agents.

Impact on Borrowers

Borrowers stand to benefit significantly from these changes. They will be able to:

• Check the legitimacy of lending apps using the RBI's public directory

• Compare loan offers from multiple REs on one platform, ensuring better choice and reduced chances of exploitation

• Avoid unauthorised apps that pose data risks or use unlawful practices

Impact on Lending Platforms and Fintechs

For fintech companies, especially LSPs and aggregators, the new guidelines mean:

• The need to revamp user interfaces to show multiple lender offers transparently

• Increased scrutiny and onboarding procedures from regulated lenders

• Investment in data protection protocols and infrastructure audits

While this might increase compliance costs, it also helps build trust with customers and ensures long-term viability under regulatory oversight.

What Regulated Entities Must Do Now

The timeline is tight, and RBI expects all regulated lenders to act fast:

• By May 13: RBI's CIMS portal becomes operational

• By June 15: All REs must upload their lending apps’ details

• By July 1: The public directory goes live, helping consumers navigate the lending space with confidence

Failure to comply could result in regulatory actions or penalties, especially for REs seen as supporting unregulated LSPs or misrepresenting data.

A Step Towards Safer Digital Lending in India

The RBI’s Digital Lending Directions 2025 mark a significant milestone in shaping a safer, more transparent digital lending ecosystem. With measures focusing on data integrity, public transparency, and borrower choice, the central bank is clearly aiming to clean up the grey areas and ensure that fintech growth doesn’t come at the cost of consumer welfare.

As India pushes toward a digital-first financial future, such proactive regulations will help balance innovation with accountability. For users, the message is clear: Know your lender, and verify the app before you borrow.

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