Reserve Bank of India focus on digital lending applications

Updated on Aug. 31, 2022, 2:02 p.m.

The Digital Lending Applications are making huge wave in the financial markets over the coming years. Lending is a process where in the person gives money to the borrower in return (interest on the money) for some amount. With the rise of technology, there have been many Apps and other financial instruments created in the digital world to make sure you get your money back.

The Digital lending is a procedure, where in you can use the Web Based Platforms and advanced technologies using the Digital Channels like the E-Commerce Platforms, Bank Accounts and the Mobile Wallets.Most of the lending process deals with amazing customer experience, if the customer experience is good, then the Apps will reap rich dividends, otherwise the Apps will not function effectively and never give the desired results.

Digital lending refers to finding an effective Touch and Tech Channel in order to have both human and digital features combined with customer feedback. It is influenced by three major factors and they are given below as follows:

  • Customers Access to Digital Channels.
  • Willingness to use Digital Services in India.
  • Digital Data for Acquisitions and Underwriting.

With the rise of Internet and affiliated technologies, most of the people from various geographical areas are able to access the financial services and most of the Digital Lending Apps have overcome traditional restrictions, thereby having good customer experience.

Some of the top Digital Lending Apps helping in undertaking the financial transactions to satisfy their requirements are given below as follows:


This App for digital lending started in 2018 and this encourages the customers to satisfy their lending abilities using technologies. You can get access to the Home Loans and Personal Loans at your fingertips. This application is easy to install and follows the Know Your Customer principles and has a strong protection mechanism to safeguard your valuable data.

This app work with the help of the captive NBFC FincFriend Private Limited to offer short term Personal Loans and has various underwriting instruments like online data sources and not restricted to Credit ratings.


This company started its work in 2018 and has got an amazing customer base in more than 700 town in India and this is available in 3 minutes and benefits more customerswith no Annual and Joining fees.

GalaxyCard stresses on offering more Credit Cards to the customers having salary of less than 30K per month.The customers can download the Application and do the Online Registrations. The application process is online and requires 3 important data like

  • Pan Card Details.
  • Aadhar Card Details.
  • 3 Months Bank Statements.


This is Mumbai based company offering the ideal digital marketing platforms for the young salaried professionals. We are apt in offering the short term and long-term loans ranging from INR 8000 to INR 300,000 up to 1 year for the working professionals based on their earning potentials. Furthermore, you will be astonished to know that this App known as CASHe uses the algorithm-based Machine Learning platforms.

What is business model of Digital Lending application?

Digital lending applications target youth to provide loans at high interest and without much documentation. They assess customer information based on AI and credit worthiness information.

The business cycle of digital lending application can be broken in 5 steps.

Customer Procurements

The Financial Service Providers must get their customers using various digital marketing tools and components supported by the referrals received from the customers. Most of the Digital Lending Applications will have various tools like the SMS Alerts, Secure Quick Response Codes, Online Banners and others.

Analytics and Approvals

Use of the Digital Lending Applications, the lenders can create the Digital Data Bank to make sure that the services are very fast, and more automated using the conventional resources. This could be the Advanced Algorithms, Analytics and make effective credit related decisions.


The Financial Service Providers should have robust collection process, by asking customers to bring the account up to date before due date to avoid late payment charges. We must use the late payment tracker to check behaviour of the customers and recover their money. Furthermore, these agencies must create their own videos and customised messages to stress on repayment of the amount and avoid the account getting delinquent.

Customer Engagement

The Digital Lending Process revolves around the customer and the lending agencies roll out new schemes and analyse the behaviour of the customer and address their queries in a logical manner. A good relationship between the client and the Financial Service provider is the key to protect their interest and promote their welfare. We do simple things like

  • Explain the results of not making payments on time.
  • Explaining various channels of raising the concerns.
  • Explain the terms and conditions in a simple manner.

Repayment and Disbursement of Funds

Most of the Digital Lenders will distribute the loans and then collect the payment through various digital channels like E-commerce platforms, Mobile Wallets, and the Bank Account. These cashless options will be used to enhance the operational efficiency and get rid of the fraudulent activities by offering a clean audit process.

The quicker dispersing of the money will make sure that customer will have regular access to the funds. Omni channel customer support will always make the customer journey more effective and also encourage the brand visibility through word of mouth and other channels.

Measures Undertaken by Reserve Bank of India to Have Tight Scrutiny Over the Digital Lending Applications

  • The banks initiating the loan and its associated banks will be allowed to disburse and collect re-payments on loans, and this will not be the responsibility of the third parties.
  • The fee paid to the Digital Lending Apps has to be borne by the lenders and the responsibility will not fall on the borrowers.
  • Data collected by DLAs (Digital Lending Apps) must be need-based and request based and must have clear audit trails and should be only done with the clear consent of the borrower.
  • RBI has prohibited automatic and unreasonable increases in credit limits without the effective consent of the borrower and said that interest rates and other charges must be clearly communicated to the borrowers before the amount is disbursed.

The above-mentioned policies are very good and will play a critical role in containing the confusion and the corruptive practices, initiated by the Digital Learning Apps. The above-mentioned policies are getting implemented from August 10, failing to implement these policies the Digital Lending Apps and agencies will lose the right to trade legally.

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