Digital India Trust Agency

About Digital India Trust Agency

• It will be responsible for stopping illegal lending apps from popping up.
• It will enable the verification of these digital lending apps and will maintain a public register of these verified applications.
• Any app which will not carry the “verified” tag of DIGITA, will be considered unauthorised.
• Significance: This will create an important and much-needed checkpoint in the fight against online financial fraud.

What is digital lending?

• It is a remote andautomated lending process, largely by use of seamless digital technologies.
• It involves lending through web platforms or mobile apps, utilising technology in customer acquisition, credit assessment, loan approval, disbursement, recovery and associated customer service.
• It generally involves three parties – a lender, a lending service provider (including a digital lending platform) and a borrower.
• It includes products like Buy Now, Pay Later (BNPL), which is a financing option (or simply a short-term loan product).

It allows one to buy a product or avail a service without having to worry about paying for it immediately.

Q1: What is the role of RBI?

It acts as a regulator and supervisor of the overall financial system. This injects public confidence into the national financial system, protects interest rates, and provides positive banking alternatives to the public.

Source: RBI mulls to set up Digital India Trust Agency to check illegal lending apps