RBI To Set Up Public Repository For Digital Lending Apps: Benefits For Borrowers Explained

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New Delhi: The Reserve Bank of India (RBI) has  proposed setting up a public repository for digital lending apps. This database will list all authorised digital lending apps which will make it easier for people to identify legitimate platforms.

The RBI stated that regulated entities will directly update the repository with details about new or removed digital lending apps. This process will help ensure that the information stays current and accurate. "The regulated entities (REs) will report and update information about their DLAs in this repository. This measure will help the consumers to identify the unauthorised lending apps," Das stated.

How will it benefit borrowers?

- Enhanced Transparency: Borrowers will have access to a comprehensive list of authorised digital lending apps, helping them identify legitimate and trustworthy platforms.

- Reduced Fraud Risk: With a clear database of approved apps, borrowers can avoid scams and fraudulent lending platforms, ensuring safer borrowing experiences.

- Improved Decision-Making: The repository will allow borrowers to compare different lending options more easily, leading to more informed financial decisions.

Adding further, the Governor also announced a new feature called ‘Delegated Payments’ through UPI. This will allow one person (the primary user) to let another person (the secondary user) make UPI transactions from the primary user's bank account up to a certain limit. The secondary user won't need their own bank account linked to UPI. The Governor mentioned that this will help expand the reach and use of digital payments even more.

The central bank has increased the UPI transaction limit for tax payments to Rs 5 lakh up from the usual Rs 1 lakh limit that applies to most UPI transactions except for some specific cases where higher limits are allowed.

The Governor also introduced measures to speed up cheque payments. Right now, clearing cheques through the Cheque Truncation System (CTS) can take up to two working days but these changes aim to make the process quicker, benefiting both those who make payments and those who receive them.