Payment aggregators acting as loan service providers cannot handle funds between the lender and the borrower

“The principle underlying the Digital Lending Guidelines is that a LSP should not be involved in handling of funds flowing from the lender to the borrower or vice versa,” the RBI said. “While entities offering only payment aggregator (PA) services shall remain out of the ambit of ‘Guidelines on Digital Lending’, any PA also performing the role of an LSP must comply with the Digital Lending Guidelines.”

Meanwhile, the RBI has clarified that for loans against salary the repayments can be made

by the corporate employer by deducting the amount from the borrower’s salary. Though the central bank reiterated that entities regulated by the RBI should ensure that loan service providers do not have any control over the flow of funds directly or indirectly in such transactions.

“It has also to be ensured that repayment is directly from the bank account of the employer to the regulated entity,” the RBI said.

The central bank also clarified that a reasonable one-time processing fee can be retained if the customer exits the loan during cooling-off period. This fee has to be disclosed to the customer upfront.

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Under the digital lending framework, all loan disbursals will take place between the bank account of the borrower and entities regulated by the central bank. No passthrough of any loan is allowed via a third party.