Lending Apps

What changed

RBI's repeal banner on its 2022 Digital Lending page says the Digital Lending Directions are dated 8 May 2025. On 28 November 2025 RBI moved its rules into separate Directions for each type of firm. We understand from published reviews of the consolidation that the May 2025 Directions were folded into these. We have not confirmed this on rbi.org.in. For NBFCs, the digital lending rules now sit in Chapter III of the Credit Facilities Directions. Paragraph numbers differ from the May 2025 text. Every paragraph number on this page is from the NBFC Directions. We have not opened the matching Directions for banks, so we cannot say if their numbers or wording differ.

The paragraphs on this page come from the Directions for NBFCs. Banks and other lenders have their own Directions, and the numbers may differ.

Law (for NBFCs, Chapter III, Para 10): money moves on regulated rails only. The loan goes straight into the borrower's bank account, and repayments go straight back to the NBFC's bank account.

Law (for NBFCs, Chapter III, Para 10(2) and 10(3)): funds must not pass through or pool in a lending service provider's account. No third party may control the flow of funds.

Narrow exceptions exist (Para 10(1) and 10(5)). Co-lending and direct payment to an end-beneficiary are both allowed. Cash recovery is allowed too, but only for overdue loans, and it must show in the borrower's account the same day.

Law (for NBFCs, Chapter III, Para 13(1)): lending apps must keep away from the borrower's phone. They must not access files and media, contact lists or call logs. A one-time access to camera, microphone or location is allowed only for onboarding or KYC, with the borrower's clear consent.

Law (for NBFCs, Chapter III, Para 9(1) and 9(3)): the Key Fact Statement (KFS) is a standard summary of the loan's terms. The NBFC must provide it under its Responsible Business Conduct Directions (Para 9(1)). The KFS and other loan papers must be digitally signed and sent to the borrower's email or SMS when the loan is signed (Para 9(3)). Good practice: do not hide the KFS behind a scroll.

Law (for NBFCs, Chapter III, Para 11): the borrower can leave a digital loan during a cooling-off period without penalty. The NBFC sets the period in its credit policy, but it cannot be less than one day. A borrower who exits repays the principal and the proportionate APR. The NBFC may keep a reasonable one-time processing fee, but only if the KFS showed it upfront.

Law (for NBFCs, Chapter III, Para 14(4)): data must still be stored only in India. The NBFC Directions allow processing outside India only if you delete the data from the foreign servers and bring it back to India within 24 hours.

Source: RBI/DOR/2025-26/347, 28 November 2025 (version updated as on 15 July 2026), opened on rbi.org.in on 9 October 2026. Status checked 2026-10-09. This text is in the NBFC Directions; we have not opened the matching Directions for banks.