RBI's Digital Lending Guidelines: What Borrowers Should Know

As digital lending grew rapidly, so did complaints about hidden charges, aggressive recovery practices, and unclear terms. The RBI's Digital Lending Guidelines were introduced to set clear rules of the road — and understanding them helps you spot a legitimate lender from a predatory one.

Key borrower protections

• Key Fact Statement (KFS): Lenders must provide a standardised summary of all charges — interest, processing fee, and any other cost — before you sign, in one clear document rather than scattered across fine print.
• No unsolicited credit line increases: Digital lenders cannot automatically increase your loan or credit limit without your explicit consent.
• Cooling-off period: Borrowers get a window to exit a digital loan by repaying the principal and proportionate charges, without additional penalty.
• Regulated recovery practices: Lending Service Providers must follow a fair, disclosed recovery process — harassment-style recovery calls are explicitly against the framework.

What to check before borrowing digitally

Ask for the Key Fact Statement upfront — a legitimate lender or facilitator will provide it without hesitation. Verify the lender is actually a regulated bank or NBFC (not just an app), and be wary of any lender pushing you to skip reading terms or rushing the process.

This is also why working through a transparent marketplace matters: every fee should be disclosed upfront, in plain language, before you commit to anything.