RBI's New Rules On Digital Lending Apps: What Should You Expect From May 13?

The Reserve Bank of India has issued new guidelines under the Digital Lending Directions, 2025, in a regulatory push to streamline the digital lending ecosystem.

These measures, coming into effect from May 13, aim to boost transparency, improve borrower protection and bring greater accountability among lending platforms.

So, what changes should borrowers, fintechs and lenders prepare for?

From May 13 onwards, all financial institutions regulated by the RBI will be required to register their digital lending apps on a new platform — the Centralised Information Management System. This portal will serve as an official database of lending apps connected to licenced banks and non-banking financial companies.

Regulated entities must complete their initial submissions to the portal by June 15. The move is seen as a step toward curbing the growing number of unregistered or fraudulent lending apps.

By July 1, the RBI will publish a public directory of digital lending apps on its website. This list will help users identify whether a lending app is legitimately linked with a licenced lender.

However, the RBI has made it clear that it will not verify the accuracy of the uploaded data. The information in the directory will be published as is, based on details submitted by the regulated entities. The list will be updated automatically as new apps are added or existing ones removed.

For platforms that serve as aggregators — offering loans from multiple lenders — new display norms have been introduced. These platforms must now present borrowers with a clear digital comparison of available loan offers that match their criteria, along with the names of lenders whose offers didn’t qualify.

This ensures borrowers can have access to a broader set of digital lending options and make more informed borrowing decisions without bias.

Before joining hands with third-party lending service providers, regulated financial institutions must now conduct detailed due diligence. They are expected to assess the technical soundness of their partners, review data handling practices and evaluate how securely customer data is stored.

This move is aimed at safeguarding users from data misuse and improving overall trust in the digital lending ecosystem.

India's digital lending sector has grown rapidly, offering convenience and access to credit at the tap of a screen. This growth has also raised red flags over misleading terms, hidden fees, aggressive recovery tactics and fly-by-night operators.

By enforcing uniform standards, the RBI is aiming to bring credibility and structure to a space that has, until now, operated with limited oversight.

Borrowers will soon be able to verify lending apps through the RBI's public directory, bringing some relief and clarity to a cluttered digital lending industry.

Lenders, meanwhile, must ensure all their digital apps are registered with the RBI, while LSPs will need to redesign their platforms to comply with the new display rules.