News Excerpt: 

RBI released draft guidelines for a regulatory framework for the aggregation of loan products by lending service providers (LSP) to enhance transparency and enable borrowers to have prior information about potential lenders.

More about News:

• The Reserve Bank of India (RBI) has proposed that banks and non-banking finance companies (NBFCs) should ensure that their loan service providers (LSPs) provide a digital view of all the loan offers available to the borrower from all the willing lenders that the LSP has arrangements.
• The digital view should include details like 
• the name of the lender, 
• loan amount and tenor, 
• annual percentage rate, and 
• other key terms and conditions, enabling fair comparison between offers.
• The LSP should follow a consistent approach to ascertain the willingness of lenders to offer a loan, and this approach should be disclosed on their website.
• A link to the key facts statement (KFS) must be provided for each regulated entity (bank or NBFC).
• The content displayed by the LSP should be unbiased and should not directly or indirectly promote or push a product of a particular lender, including through deceptive practices or patterns that might mislead borrowers.
• The RBI has defined an LSP as an agent of a regulated entity (banks and NBFCs) that carries out functions like customer acquisition, underwriting support, pricing support, servicing, monitoring, and recovery of loans or loan portfolios on behalf of the regulated entities.
• The draft norms aim to enhance transparency and enable borrowers to have prior information about potential lenders through these web aggregators or digital lending apps/platforms.