Saturday, October 25, 2025
  • Login
Euro Times
No Result
View All Result
  • Home
  • Finance
  • Business
  • World
  • Politics
  • Markets
  • Stock Market
  • Cryptocurrency
  • Investing
  • Health
  • Technology
  • Home
  • Finance
  • Business
  • World
  • Politics
  • Markets
  • Stock Market
  • Cryptocurrency
  • Investing
  • Health
  • Technology
Euro Times
No Result
View All Result

RBI issues guidelines on default loss guarantee in digital lending

by Euro Times
June 8, 2023
in Business
Reading Time: 2 mins read
A A
0
Home Business
Share on FacebookShare on Twitter


The Reserve Bank on Thursday came out with guidelines on default loss guarantee (DLG) in digital lending, a move aimed at ensuring the orderly development of the credit delivery system.

DLG is a contractual arrangement between a regulated entity (RE) and an entity meeting prescribed norms, under which the latter guarantees to compensate the RE, loss due to default up to a certain percentage of the loan portfolio specified upfront. RE refers to entities, like banks and NBFCs, which are regulated by the RBI.

As per the guidelines, a RE may enter into DLG arrangements only with a Lending Service Provider (LSP)3/ other RE with which it has entered into an outsourcing (LSP) arrangement.

”DLG arrangements must be backed by an explicit legally enforceable contract between the RE and the DLG provider,” it said.

Last year, the Reserve Bank issued the regulatory framework for digital lending. With a view to further promoting responsible innovation and prudent risk management, it has been decided to issue guidelines on Default Loss Guarantee arrangements in Digital Lending, RBI Governor Shaktikanta Das said while announcing the monetary policy earlier in the day. This, he said, will further facilitate the orderly development of the digital lending ecosystem and enhance credit penetration in the economy.

The guidelines further said RE should ensure that the total amount of DLG cover on any outstanding portfolio, which is specified upfront should not exceed 5 per cent of the amount of that loan portfolio. ”In case of implicit guarantee arrangements, the DLG provider shall not bear performance risk of more than the equivalent amount of five per cent of the underlying loan portfolio,” it added.

It also said recognition of individual loan assets in the portfolio as NPA and consequent provisioning will be the responsibility of the RE.

Also, the REs will have put in place a Board approved policy before entering into any DLG arrangement.

Also Watch: Mohammed Siraj’s viral video at WTC Final 2023. All about the son of auto-rickshaw driver, who was forced to play cricket while wearing slippers during his early days

Also Read: Multibagger cement stock hits 52-week high on record date for final dividend

Also Watch: Whistleblower claims US govt in possession of UFOs. From the latest row to NASA’s video of ‘UFO’ over Middle East, here’s everything you need to know



Source link

Tags: defaultdigitalguaranteeguidelinesIssueslendinglossRBI
Previous Post

‘MPC’s decision reflects RBI’s commitment to support growth’

Next Post

Cisco Live 2023 live: All the news and announcements from Day Two

Related Posts

Markets pricey with modest EPS growth; autos, hospitality offer opportunities: Venkatesh Balasubramaniam of JM Financial

Markets pricey with modest EPS growth; autos, hospitality offer opportunities: Venkatesh Balasubramaniam of JM Financial

by Euro Times
October 25, 2025
0

Venkatesh Balasubramaniam of JM Monetary shared a complete view of the Indian fairness markets, highlighting the challenges and alternatives amid...

Phillips Edison & Company, Inc. (PECO) Q3 2025 Earnings Call Transcript

Phillips Edison & Company, Inc. (PECO) Q3 2025 Earnings Call Transcript

by SA Transcripts
October 25, 2025
0

Comply withQ3: 2025-10-23 Earnings AbstractEPS of $0.15 beats by $0.05  | Income of $182.67M (10.36% Y/Y) beats by $5.60M Phillips Edison...

Cyclonic Storm Over Bay Of Bengal May Trigger Heavy Rain In Odisha, Bengal From Oct 27: IMD

Cyclonic Storm Over Bay Of Bengal May Trigger Heavy Rain In Odisha, Bengal From Oct 27: IMD

by PTI
October 24, 2025
0

Requested whether or not the system will make landfall on the Odisha coast, she mentioned, "It's too early to foretell,...

We will comply with guidance from Indian government, EU: RIL on sanctions

We will comply with guidance from Indian government, EU: RIL on sanctions

by Euro Times
October 24, 2025
0

A panoramic view of Reliance Petroleum's refinery complicated at Jamnagar in Gujarat. Reliance Industries (RIL) on Friday mentioned that it's...

Paytm and Vedanta emerge as top buys amid sectoral rotation and profit booking: CA Rudramurthy BV

Paytm and Vedanta emerge as top buys amid sectoral rotation and profit booking: CA Rudramurthy BV

by Anupam Nagar
October 24, 2025
0

After six consecutive classes of strong features, the Nifty paused for breath on Friday, slipping beneath the 26,000 mark. Whereas...

Washington’s Quantum Push Puts Rigetti Stock In Focus (NASDAQ:RGTI)

Washington’s Quantum Push Puts Rigetti Stock In Focus (NASDAQ:RGTI)

by Pythia Research
October 24, 2025
0

This text was written byObservePythia Analysis focuses on multi-bagger shares, primarily within the expertise sector. Our strategy combines monetary evaluation,...

Next Post
Cisco Live 2023 live: All the news and announcements from Day Two

Cisco Live 2023 live: All the news and announcements from Day Two

GME, AMZN, CVNA and more

GME, AMZN, CVNA and more

Winnebago Industries: Bullish Outlook Is Still Winning With Robust Fundamentals (NYSE:WGO)

Winnebago Industries: Bullish Outlook Is Still Winning With Robust Fundamentals (NYSE:WGO)

October 25, 2025
Hogs Trading Mixed at Midday

Hogs Trading Mixed at Midday

October 25, 2025
Markets pricey with modest EPS growth; autos, hospitality offer opportunities: Venkatesh Balasubramaniam of JM Financial

Markets pricey with modest EPS growth; autos, hospitality offer opportunities: Venkatesh Balasubramaniam of JM Financial

October 25, 2025
Explained: Why Dubai’s real estate prices are surging; what it means for investors, renters, and the city’s future | World News

Explained: Why Dubai’s real estate prices are surging; what it means for investors, renters, and the city’s future | World News

October 25, 2025
IDF, Israeli Police, Magen David Adom complete hostage-rescue exercise along Lebanese border

IDF, Israeli Police, Magen David Adom complete hostage-rescue exercise along Lebanese border

October 25, 2025
Trump Reportedly Wants Ballroom Named After Himself

Trump Reportedly Wants Ballroom Named After Himself

October 25, 2025
Euro Times

Get the latest news and follow the coverage of Business & Financial News, Stock Market Updates, Analysis, and more from the trusted sources.

CATEGORIES

  • Business
  • Cryptocurrency
  • Finance
  • Health
  • Investing
  • Markets
  • Politics
  • Stock Market
  • Technology
  • Uncategorized
  • World

LATEST UPDATES

Winnebago Industries: Bullish Outlook Is Still Winning With Robust Fundamentals (NYSE:WGO)

Hogs Trading Mixed at Midday

  • Disclaimer
  • Privacy Policy
  • DMCA
  • Cookie Privacy Policy
  • Terms and Conditions
  • Contact us

Copyright © 2022 - Euro Times.
Euro Times is not responsible for the content of external sites.

No Result
View All Result
  • Home
  • Finance
  • Business
  • World
  • Politics
  • Markets
  • Stock Market
  • Cryptocurrency
  • Investing
  • Health
  • Technology

Copyright © 2022 - Euro Times.
Euro Times is not responsible for the content of external sites.

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In