The Reserve Bank of India has issued updated guidance affecting digital lending platforms, particularly around outsourcing arrangements and first-loss default guarantee (FLDG) structures.
Platforms relying on third-party origination must ensure that customer-facing interfaces clearly identify the regulated entity. Outsourcing agreements must meet RBI prescribed standards for audit rights, data security, and grievance redressal.
FLDG arrangements require careful structuring to avoid regulatory characterization as synthetic lending. We recommend immediate review of existing partnership models against the latest master direction requirements.