Digital lending in India

Digital lending in India||A transformative power in financial sector

Recently,Digital lending in India has seen tremendous growth.The Reserve Bank of India (“RBI”) had initiated a working group on digital lending to explore regulation of the emerging sector in January 2021.

The Reserve Bank of India  published its Guidelines on Digital Lending (“Guidelines”) in Sep 2022, based on the recommendations of the working group.In this blog we explores the evolution, challenges and future prospects of online lending in India.

evolution of digital lending(India)

Digital lending is a new process to get loans or lines of credit from financial services provider. The entire process takes place on a digital platform. It is a way to borrow money online, mainly through digital Platform. 

Startups and non-banking finance Companies(NBFCs) were mainly responsible for this business.Commercial banks are quickly becoming financials mediator by preparing digital loans alone or teaming up with NBFCs to share the benefits .Including Peer- to-peer(P2P) platforms and traditional banks with digital branches.

Benefits of Digital Lending

  • Accessibility: Digital Lending platforms gives huge accessibility to larger Population.
  • Speed and Convenience: Technology allows quick approval and disbursement to customer.
  • Paperless Transactions.The whole process, from application to disbursement is paperless.There are no need to physical effort.

Challenges in Digital Lending

  • Regulatory Hurdles
  • Data Privacy and security
  • High Default Rates.
  • Personalized lending
  • Financial Inclusion

Must read

Aadhar card download process 



Leave a Reply

Your email address will not be published. Required fields are marked *