The Reserve Bank of India issued revised digital lending guidelines on 1 March 2026 through a Master Direction supplement, building on the Digital Lending Framework first established by the RBI Working Committee report of November 2021 and the subsequent Master Direction on Digital Lending issued in September 2022. The revised guidelines take immediate effect for all Regulated Entities (REs) — banks, co-operative banks, NBFCs, and Housing Finance Companies — as well as their Lending Service Provider (LSP) partners. For the rapidly growing digital lending sector in Delhi NCR's fintech ecosystem, the revised framework introduces compliance requirements that cannot be deferred.
Enhanced EMI Transparency Requirements
The revised guidelines mandate that every digital loan product display a Key Fact Statement (KFS) to the borrower before sanction. The KFS is not new — it was introduced in 2022 — but the revised format is significantly more prescriptive. The KFS must now display: the Annual Percentage Rate (APR) calculated on a standardised methodology prescribed by the RBI, a complete amortisation schedule for the full loan tenure broken down by principal, interest, and fee components, the total cost of credit in rupee terms (not percentage terms only), the implications of pre-payment including any pre-payment penalty computed at the current outstanding principal, and the cost of any ancillary products — such as insurance or subscription services — that are mandatory or offered alongside the loan.
The APR calculation methodology has been standardised to prevent REs and LSPs from presenting artificially low rates by excluding processing fees, account maintenance charges, or insurance premiums from the rate computation. Under the revised guidelines, the APR must incorporate all mandatory charges and fees over the loan lifecycle. LSPs that have been presenting headline rates that exclude fees face immediate product redesign requirements.
Fee Disclosure and Collection Standards
The revised guidelines prohibit the collection of any charge from a borrower that is not disclosed in the KFS at the time of sanction. Post-sanction imposition of fees — including late payment fees restructured as "administrative charges," or convenience fees for digital repayment modes — without prior KFS disclosure constitutes a violation of the guidelines. The RE remains responsible for KFS compliance even where the LSP is the customer-facing party; passing off responsibility to the LSP in internal contracts does not discharge the RE's regulatory obligation.
Collection charges have been specifically regulated. Collection practices that involve third-party recovery agents must comply with the RBI's existing guidelines on outsourcing of financial services. New provisions prohibit recovery agents from contacting a borrower before 8 AM or after 7 PM, from contacting family members who are not co-borrowers, and from using social media or messaging platforms to share default information with persons other than the borrower. Digital lending platforms that have used automated escalation systems — sending default notices to emergency contacts — must disable those features immediately.