The Reserve Bank of India (RBI) on November 28, 2025, issued the Reserve Bank of India (Local Area Banks– Credit Facilities) Directions, 2025.
The following has been stated: -
•The RBI (Local Area Banks – Credit Facilities) Directions, 2025, set out rules for LABs on digital lending, gold/silver-backed loans, microfinance, and non-fund-based facilities, requiring Board-approved policies.
•LABs must conduct due diligence on Lending Service Providers (LSPs), maintain oversight, and ensure borrower protection.
•Digital lending platforms must provide unbiased loan information, Key Fact Statements, and transparent disclosures.
•Loan disbursements must go directly to borrower accounts, with strict compliance on monitoring, repayment, and customer grievance mechanisms.
•These Directions shall come into effect immediately.
[Notification No.: RBI/ 2025-26/229 DOR.CRE.REC.No. /07-01-003/2025-26]
