Reserve Bank of India (RBI) is working on a comprehensive regulatory framework for web-aggregators of loan products (WALP).
These are platforms that aggregate loan offers from multiple lenders and enable borrowers to compare and choose the best available lender to avail loan from.
Several concerns relating to such web-aggregation of loan products harming consumers interest have come to our notice. It has, therefore, been decided to lay down a regulatory framework for the web aggregation of loan products. This is expected to result in enhanced customer centricity and transparency in digital lending, RBI said.
Some web aggregators are not acting neutrally and are push-selling a particular loan product. The proposed framework will focus on enhancing the transparency in the operations of web aggregators, increasing customer centricity and enabling the borrowers to make informed choices, the central bank said.
This development is an outcome of the recommendations made by the Working Group on Digital Lending, which, in its report on Digital Lending submitted to the government in November 2021, recommended that web aggregators of loan products should be considered as lending service providers (LSPs) and be subjected to discipline and code of conduct by the regulated entities to which they are attached. The Working Group recommended the government prescribe a dedicated framework to this effect.