Digital NBFCs sanctioned 13.2 crore loans worth ₹2.15 lakh crore in FY2025-26, according to FACE’s March 2026 report. At that scale, the RBI (Digital Lending) Directions, 2025 make fund-flow, disclosure and app-governance controls system requirements rather than manual compliance checks. Loan origination platforms must support direct disbursal and repayment paths, accurate Key Fact Statements and complete Annual Percentage Rate calculations, subject to the Directions’ specified exceptions.
Quick answer: The RBI (Digital Lending) Directions, 2025 require that loan disbursals and repayments move directly between borrower and lender bank accounts, that every digital loan carry a standardized Key Fact Statement before sanction, and that Annual Percentage Rate calculations include all fees. For loan origination platforms, this means disbursal routing, KFS generation, and APR computation have to be built into the system itself.
What the RBI (Digital Lending) Directions, 2025 Changed
The Reserve Bank of India issued the RBI (Digital Lending) Directions, 2025 on May 8, 2025, consolidating the 2022 Guidelines on Digital Lending and the 2023 First Loss Default Guarantee (FLDG) framework into a single rulebook. It applies to all regulated entities, meaning commercial banks, co-operative banks, non-banking financial companies (NBFCs), housing finance companies, and their lending service provider (LSP) partners.
Three provisions matter most for origination platforms:
Direct disbursal and repayment. Loan disbursal must generally move to the borrower’s bank account, and repayment must move directly to the regulated entity’s bank account, without an LSP pass-through or pool account. The Directions specify limited exceptions that must be configured and documented correctly.
Key Fact Statement (KFS). Regulated entities must provide a KFS in accordance with the RBI’s April 15, 2024 KFS circular, using the actual loan terms and obtaining acknowledgement before the contract is executed.
Annual Percentage Rate (APR). The KFS must disclose the APR as defined under the applicable RBI framework, including charges that form part of the cost of credit. The platform should calculate it consistently from governed fee and repayment data rather than rely on a manually maintained headline rate.
Regulated entities also had to report their digital lending apps (DLAs) through RBI’s Centralised Information Management System (CIMS) portal by June 15, 2025, and LSP arrangements involving multiple lenders had until November 1, 2025 to meet the Directions’ disclosure requirements.
Why This Sits With the LOS, Not Just the Compliance Team
Direct disbursal, KFS accuracy, and all-inclusive APR are not policies a compliance team can enforce after a loan is originated. They are outcomes of how the loan origination system routes money, pulls fee data, and generates documents at the point of sanction.
If the disbursal workflow still writes to an intermediary account, no amount of downstream monitoring fixes that. If the KFS template lives outside the origination engine and gets manually populated, every loan is a fresh opportunity for a mismatch between what the borrower sees and what the loan actually costs.
That is the practical shift. Compliance obligations that used to sit in a policy binder now sit in configuration and workflow design.
What LOS Platforms Now Need to Support
| RBI requirement | What the LOS must do | Risk if unsupported |
| Direct disbursal to borrower | Route funds account-to-account, with no intermediate LSP pool step in the workflow | Non-compliance unless a permitted exception applies |
| Standardized KFS | Auto-generate the KFS from live loan terms at the point of sanction | Manual creation can introduce version drift and disclosure errors |
| All-inclusive APR | Pull every mandatory fee into the APR calculation, not just the headline interest rate | Incorrect APR can create disclosure and compliance risk |
| DLA reporting to CIMS | Maintain accurate, exportable records of every digital lending app in use | Incomplete records can create reporting and supervisory risk |
| FLDG within the 5% cap | Track guarantee exposure against the outstanding portfolio in real time | Weak aggregation can create DLG monitoring and limit-control risk |
Configurable workflows and governed calculation services can make regulatory changes easier to implement, but configuration alone does not ensure compliance. Lenders still need legal interpretation, version control, testing, approvals and evidence that the configured workflow operates as intended.
The Data Behind the Push for Compliance
The scale of digital lending makes reliable controls material. FACE reports that digital NBFCs sanctioned 13.2 crore loans worth ₹2.15 lakh crore in FY2025-26, while outstanding principal reached ₹1.43 lakh crore in March 2026. The report also records improvement in the share of loans overdue by more than 90 days; that portfolio trend should not be treated as proof that a particular regulation or underwriting method caused the change.
The FACE report states that more than 60% of sanctions were to customers in mid-low risk profiles, with the remainder spread across other risk bands. Its portfolio analysis provides context on market scale and borrower mix; the compliance case for fund-flow and disclosure controls comes from the RBI Directions themselves.
Evaluation Checklist: Is Your LOS Directions-Ready?
- Does disbursal route directly to the borrower’s account with no LSP pooling step in the workflow?
- Is the KFS generated automatically from live loan terms, not populated manually?
- Does APR calculation include all mandatory fees by default, not as an optional field?
- Can the platform export accurate DLA records for CIMS reporting without a manual reconciliation exercise?
- Is FLDG exposure tracked against the 5% cap in real time, across all LSP relationships?
- Can regulatory workflow changes be versioned, tested, approved and evidenced without changing core code?
Bottom Line
The RBI (Digital Lending) Directions, 2025 make disbursal routing, repayment flows, KFS accuracy, APR disclosure, DLA reporting and DLG monitoring part of lending-system design. Lenders evaluating or upgrading an LOS should assess regulatory adaptability together with governance: requirements must be interpreted, configured, tested, approved, monitored and retained as audit evidence.
Last reviewed: September 15, 2026. This article provides general information, not legal advice. Institutions should confirm requirements and applicability against current RBI directions and professional advice.
Frequently Asked Questions (FAQs)
The Directions apply to regulated entities (banks, NBFCs, housing finance companies) and their LSP partners. LOS vendors are not directly regulated, but the platforms they sell have to support compliant workflows, since the regulated entity carries the liability for how the system behaves.
That workflow is now non-compliant regardless of past practice. Regulated entities using such platforms need to reconfigure the disbursal path to move funds directly between borrower and lender accounts, and this typically requires LOS-level changes rather than a policy update alone.
A configurable rules engine that can pull live loan terms into a standardized KFS template and calculate APR inclusive of all fees is generally sufficient. The gap shows up in platforms where fee data, disbursal logic, and document generation live in separate, poorly connected modules.
