Regulated entities (res), together with banks and different lenders, can have time till november 30 to transition current customer accounts to the new digital lending guidelines, the Reserve Bank of India (rbi) stated on friday.
The significant bank clarified through a notification that the norms, released through a circular dated august 10, might be relevant to existing customers availing of clean loans and to new clients getting on-boarded from the date of the circular. “however, for you to make a smooth transition, res will be given time until november 30, 2022, to install area adequate structures and processes to make sure that ‘existing digital loans’ (sanctioned as on the date of the circular) also are in compliance with these recommendations in both letter and spirit,” the rbi said.
The regulator reiterated that outsourcing preparations entered into by way of REs with a lending service provider (lsp) or digital lending app (dla) do no longer diminish the REs’ obligations and they shall retain to conform to present pointers on outsourcing. It directed res to make certain that lsps engaged with the aid of them and dlas comply with the guidelines.
The august 10 guidelines require REs to ensure that every one loan servicing and repayments are finished by way of the borrower directly into the RE’s bank account with none pass-through account or pool account of a third party. Res may also must make certain that no disbursal is made to a 3rd-party account, inclusive of the debts of lsps and their dlas.