LSPs are entities appointed by banks or NBFCs to perform certain functions such as customer acquisition, underwriting and loan recovery on digital platforms. In some cases, a regulated entity may also act as an LSP.
RBI's draft guidelines state that banks and NBFCs should ensure that their LSPs provide a digital view of all loan offers available to the borrower from all interested lenders with whom they have LSP arrangements.
RBI said the digital view should include the name of the lending bank or NBF, the amount and tenure of the loan, the annual percentage rate and other key terms and conditions that would enable the borrower to make comparisons. between different proposals.
RBI said the guidelines have been issued as it has been observed that many LSPs provide aggregation services for loan products even though they have outsourcing arrangements with multiple lenders and the digital lending app of the LSP connects the borrower to one of the lenders. Mixes.In such cases, particularly where an LSP has made arrangements with multiple lenders, the identity of the potential lender may not be known to the borrower in advance.
While LSPs can adopt any mechanism to ascertain the willingness of lenders to lend, RBI said they should follow a "consistent approach which should be appropriately disclosed on their website.
It states that a link to the Key Fact Statement (KFS) in respect of each regulated entity should also be provided.
The guidelines state that the content displayed by LSPs should be "unbiased" and should not directly or indirectly promote the product of a particular lender or involve any practices or deceptive practices intended to mislead borrowers in choosing a particular loan offer. Patterns should not be used.
RBI has invited comments from stakeholders on the draft circular till May 31.
RBI's draft guidelines state that banks and NBFCs should ensure that their LSPs provide a digital view of all loan offers available to the borrower from all interested lenders with whom they have LSP arrangements.
RBI said the digital view should include the name of the lending bank or NBF, the amount and tenure of the loan, the annual percentage rate and other key terms and conditions that would enable the borrower to make comparisons. between different proposals.
RBI said the guidelines have been issued as it has been observed that many LSPs provide aggregation services for loan products even though they have outsourcing arrangements with multiple lenders and the digital lending app of the LSP connects the borrower to one of the lenders. Mixes.In such cases, particularly where an LSP has made arrangements with multiple lenders, the identity of the potential lender may not be known to the borrower in advance.
While LSPs can adopt any mechanism to ascertain the willingness of lenders to lend, RBI said they should follow a "consistent approach which should be appropriately disclosed on their website.
It states that a link to the Key Fact Statement (KFS) in respect of each regulated entity should also be provided.
The guidelines state that the content displayed by LSPs should be "unbiased" and should not directly or indirectly promote the product of a particular lender or involve any practices or deceptive practices intended to mislead borrowers in choosing a particular loan offer. Patterns should not be used.
RBI has invited comments from stakeholders on the draft circular till May 31.
