In a significant move to curtail the rising fraud in the digital lending setup, the Reserve Bank of India (RBI) on Thursday announced creating a public repository of Digital Lending Apps (DLAs).

While announcing the deliberations of the MPC meet, Governor Shaktikanta Das said the move aims to aid the customers in verifying the claim of DLAs association with the Regulated Entities.

He said that there were media reports that have highlighted continued presence of unscrupulous players in digital lending who falsely claim their association with RBI regulated entities.

According to the information shared by the Governor, the repository will be based on data submitted by the REs, without any intervention by RBI, directly to the repository.

This data will get updated as and when the REs report the details, i.e., addition of new DLAs or deletion of any existing DLA.

He said that the detailed instructions in this regard shall be issued shortly.

RBI also proposed to increase the frequency of reporting of credit information to credit information companies (CICs) to a fortnightly basis or at shorter intervals.

At present, lenders are required to report credit information to credit information companies (CICs) on a monthly basis or at such shorter intervals as may be agreed between the lenders and the CICs.

Consequently, borrowers will benefit from faster updation of their credit information, especially when they repay their loans. The lenders, on their part, will be able to make better risk assessment of borrowers, the RBI Governor said.

The Governor in his speech also highlighted that it is observed that the sectors in which pre-emptive regulatory measures were announced by the RBI in November last year have shown moderation in credit growth.

However, certain segments of personal loans continue to witness high growth, he said.

Excess leverage through retail loans, mostly for consumption purposes, needs careful monitoring from macro-prudential point of view,” he added.

“It calls for careful assessment and calibration of underwriting standards, as may be required, as well as post-sanction monitoring of such loans.”

In September 2022, RBI released guidelines on Digital Lending addressing protection of customers interest, data privacy, concerns on interest rates and recovery practices, mis-selling, etc.