RBI Mandates Reporting of Digital Lending Apps Via CIIMS Portal From May 13

The Reserve Bank of India (RBI) has mandated that all regulated entities report their digital lending applications through the Centralised Information Management System (CIMS) portal starting from May 13, 2025. The initial deadline for data submission is set for June 15, 2025. This initiative is aimed at enhancing transparency and accountability within the digital lending sector.

The Reserve Bank of India (RBI) Digital Lending Directions 2025, released in May 2025, are a comprehensive regulatory framework aimed at cleaning up the digital lending ecosystem in india. These updated norms respond to inceasing concerns over predatory lending practice, harassment by recovery agents, data misuse and fake or unregulated lending apps.

The new rules aim to balance innovation with consumer protection, tighten oversight of Lending Service Providers (LSPs) and ensure secure and ethical lending practics.

To whom do the new rules apply?

The new RBI rules for digital lending apps apply to all regulated entities (REs), which include banks, non-banking finance corporations (NBFCs), and cooperative banks that offer digital loans. These guidelines are designed to ensure transparency and accountability in digital lending practices, thereby protecting borrowers from unfair practices.

Lending Service Providers (LSPs) and Digital Lending Apps (DLAs) associated with these REs.

Features of the Digital Lending Directions,2025

Transparency & Borrower Rights

Every borrower must be shown a comprehensive list of all available digital loan options they qualify for including lone amount, interest rate (APR), tenure, repayment schedule and EMI, all charges including late payment fees and penalties, identity of the lending institution (RE). This prevents mis-selling and coercive upselling by LSPs.

Loan Disbursment & Repayment

All funds must flow directly between the borrower's bank account and the REs bank account. No third party wallets or intermediaries are allowed to handle disbursment or repayments. Ensure audit trails and prevents fraud. No automatic debit mandates without prior consent.

Data Privacy and Consent Rules

Borrowers must be informed clearly what data is being collected. Lending apps cannot access phone contacts, media files, call logs and SMS without explicit, need based consent.

Consent must be revocable and data usage must be minimized and all collected data must be stored on servers located in India or if processed abroad, it must be erased from foreign servers and re-imported within 24 hours.

Digital Lending App (DLA) Verification and Public Listing

RBI will publish a public directory of verified DLAs by July 1, 2025 and by June 15, 2025 all REs must submit details of DLAs they work with on the CIMS portal other than this all unlisted DLAs will be considered unathorised helping project consumers from fake apps.

Cooling-off Period

Borrowers are allowed to cancel a digital loan within a specified cooling-off period after disbursment without penalty or obligation. Intended to prevent impulsive or forced borrowing.

Mandatory Loan Documentation and Communication

REs must issue Key Fact Statement (KFS) before the borrower signs the loan agreement. All agreements and communication must be in a language understood be the borrower and Digital receipts for every payment must be shared in a real time.

Grievance Redressal System

All REs must provide a dedicated grievence redressal officer and display their contact details on websites and mobile apps. complaints must be resolved within 30 days. if borrower not satisfied, borrower can escalate to the RBI ombudsman.

Why these rules were needed

The explosion in digital lending post-COVID led to rise of unregistered lending apps exploiting desperate borrowers. Illigal collection methods, including theats and harassment, privacy violation, with access to contacts/ call logs and no accountability from fintechs acting through NBFC partners.

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