The central bank of India issues lenders with a the month of November an ultimatum to adhere to new loan regulations for digital loans

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The Reserve Bank of India (RBI) has granted lenders until November 30 to put in place appropriate processes and systems to ensure that all new and existing loans are in compliance with the digital loan regulations released last month.

The RBI’s decision follows a number of reports which highlight the problems of victims who have suffered brutality and abuse by lenders of digital loans across the country. As we’ve noted, in some instances, users were unable to carry the psychological burden of threats and took their lives.

Following the recommendation of the working group that was set in 2021, these guidelines define who can loan to borrowers across the country, and what information lenders are able to access, and required that lenders expand their disclosure requirements in order to offer greater transparency to customers and better control.

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On Friday on Friday, the RBI announced that the guidelines are applicable to existing customers taking out loans as well as to new customers being in.

Central bank officials have provided the deadline of November 30 for all entities that are regulated, and have been granted licenses by the regulator to make sure that existing digital loans are conforming to the new regulations “in both letter and spirit.”

“These directions are issued under sections 21, 35A and 56 of the Banking Regulation Act, 1949, sections 45JA, 45L and 45M of the Reserve Bank of India Act, 1934, sections 30A and 32 of the National Housing Bank Act, 1987, section 6 of the Factoring Regulation Act, 2011 and section 11 of the Credit Information Companies (Regulation) Act, 2005,” the RBI stated in the note directed to commercial and cooperative financial institutions, as well as non-banking ones which include housing finance firms.

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