Monday, September 15, 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

ITR Filing Deadline Extended Till Sept 16 Amid Complaints Of Glitches On E-Filing Portal

ITR Filing Deadline Extended Till Sept 16 Amid Complaints Of Glitches On E-Filing Portal

by NDTV Profit Desk
September 15, 2025
0

The due date for submitting of Revenue Tax Returns for Evaluation Yr 2025-26 has been prolonged by one other day,...

Naidu offers farmers incentive to reduce use of urea

Naidu offers farmers incentive to reduce use of urea

by Euro Times
September 15, 2025
0

Andhra Pradesh Chief Minister Chandrababu Naidu addresses the fourth district Collectors’ Convention on the Secretariat in Amaravati on Monday. |...

Commodity Radar: Buy on dips as gold consolidates ahead of Fed. 5 tech tools to sharpen your trades

Commodity Radar: Buy on dips as gold consolidates ahead of Fed. 5 tech tools to sharpen your trades

by Shivendra Kumar
September 15, 2025
0

Gold was buying and selling with delicate weak spot on Monday amid revenue reserving forward of the US Federal Reserve's...

Phoenix to finance four Enav urban renewal projects

Phoenix to finance four Enav urban renewal projects

by Globes correspondent
September 14, 2025
0

Actual property firm Enav has signed a financing settlement with insurance coverage firm Phoenix Monetary (TASE: PHOE). Underneath the...

BSE seeks further tightening in SME IPO rules

BSE seeks further tightening in SME IPO rules

by Euro Times
September 14, 2025
0

BSE Managing Director and CEO Sundararaman Ramamurthy The BSE has sought additional tightening within the guidelines and processes associated to...

North Korean Hackers Used ChatGPT to Help Forge Deepfake ID

North Korean Hackers Used ChatGPT to Help Forge Deepfake ID

by Bloomberg News
September 14, 2025
0

A suspected North Korean state-sponsored hacking group used ChatGPT to create a deepfake of a navy ID doc to assault...

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

Trump says US struck another Venezuelan drug vessel, killing three | News

Trump says US struck another Venezuelan drug vessel, killing three | News

September 15, 2025
How to install a smart light switch or dimmer

How to install a smart light switch or dimmer

September 15, 2025
ITR Filing Deadline Extended Till Sept 16 Amid Complaints Of Glitches On E-Filing Portal

ITR Filing Deadline Extended Till Sept 16 Amid Complaints Of Glitches On E-Filing Portal

September 15, 2025
Wall Street Lunch: Trump Proposes Shift To Semiannual Earnings (undefined:TSLA)

Wall Street Lunch: Trump Proposes Shift To Semiannual Earnings (undefined:TSLA)

September 15, 2025
Rubio Is Skeptical of Gaza Deal During Jerusalem Visit

Rubio Is Skeptical of Gaza Deal During Jerusalem Visit

September 15, 2025
The Scouring of the American Middle Class

The Scouring of the American Middle Class

September 15, 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

Trump says US struck another Venezuelan drug vessel, killing three | News

How to install a smart light switch or dimmer

  • 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