RBI Set to Introduce Rules for Digital Loan Aggregators

• ByStartupStory     |    December 8, 2023

The Reserve Bank of India (RBI) is gearing up to establish a regulatory framework specifically designed for loan aggregation services provided by Lending Service Providers (LSPs). This decision stems from the recommendations put forth by the Working Group on Digital Lending, chaired by Jayant Kumar Dash, which were endorsed by the central bank back in August 2022.

Governor Shaktikanta Das highlighted the need for this new framework in response to concerns regarding how web-aggregation of loan products might impact consumers’ interests. 

The RBI had initially introduced the regulatory framework for digital lending in August/September 2022, encompassing services that aggregate loan offers from various lenders, known as web-aggregation of loan products.

To address these concerns and reinforce transparency, customer-centricity, and informed decision-making for borrowers, the forthcoming framework will specifically target enhancing the operations of web aggregators of loan products (WALPs). 

The RBI stated its intent to issue comprehensive guidelines separately to delve into this regulatory aspect.

The concept of WALP involves consolidating loan offers from multiple lenders onto an electronic platform, empowering borrowers to compare and select the most suitable loan option available from these lenders.

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