RBI issues Digital Lending Directions, 2025: Key points to know before applying for a digital loan

The Reserve Bank of India (RBI) on Thursday (May 8, 2025) issued consolidated directions on digital lending. In a statement, RBI said the "Reserve Bank of India (Digital Lending) Directions, 2025" has for the first time also included the following two aspects of digital lending:

• Instructions on Digital Lending – Transparency in Aggregation of Loan Products from Multiple Lenders

• Instructions regarding operationalization of the Public Directory of Digital Lending Apps (DLAs).

Key points for borrowers

RBI has laid down certain norms for digital lending that borrowers should know before going for a digital loan. Some of the key norms that can help borrowers are as follows:

Regulated entities or lenders are required to provide a Key Fact Statement (KFS) about the loan. The KFS is a statement of key facts of a loan agreement in simple language. This helps borrowers in making informed decisions.

Lenders have to ensure that all digitally signed documents shall be "automatically" sent to borrowers on their registered and verified email/SMS after execution of the loan contract/transactions.

Lenders are required to fully update their website in the public domain with the following details:

• All digital lending products and apps, customer care, and internal grievance mechanism, link to RBI's complaint management system and sachet portal, privacy policies, and details of lending service providers. Further, there should be links to the lending apps and lending service providers on the lender's website.

In case the borrower continues with the loan even after the cooling-off period, then they shall be allowed to make pre-payment of the digital loan. However, lenders may charge a "reasonable one-time processing fee, if the borrower exits the loan during the cooling-off period.

The digital lending directions of the RBI do not cover EMI programmes on credit cards. However, loan products offered on credit cards, which are not covered under RBI's "Master Direction – Credit Card and Debit Card – Issuance and Conduct Directions, 2022 (Updated as on March 07, 2024)" will be governed by the digital lending directions.