Finally, the Reserve Bank of India (RBI) has legitimised digital lending. It has coined a new term to describe the players in this space — lending service provider (LSP). They will not lend from their own balance sheets but play the role of outsourcing agents for banks and non-banking financial companies (NBFCs).
To be sure, the concept is not new in Indian financial architecture. In November 2006, the RBI had introduced the outsourcing arrangement for financial services providers. The direct sales agents (DSAs) of banks belong to this category.
The scale and speed at which digital lending has been spreading
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