RBI guidelines may lead to high compliance cost for digital lending apps

Industry associations are likely to approach the RBI to weed out any interpretational ambiguity

The fintech universe is looking positively at the digital lending framework brought in by the Reserve Bank of India (RBI) because the strict norms are likely to address the problem of illegal entities lending to economically weak people.

However, industry players say adherence to the framework is likely to drive up their compliance cost and increase the operational complexities of their business models, resulting in a brief period of growth slowdown in this space.

The industry associations — the Fintech Association for Consumer Empowerment (FACE) and Digital Lenders Association of India (DLAI) — are likely to approach the RBI to