The app is not necessarily the lender. Before accepting money, identify the bank or NBFC that owns the credit contract.
RBI’s digital-lending framework requires the regulated entity to provide a Key Fact Statement before execution of the loan contract.
The KFS should disclose the annual percentage rate and charges so the borrower can compare the all-inclusive cost.
Disbursal and repayment should ordinarily flow directly between the borrower and regulated entity accounts, subject to specified exceptions.
A cooling-off period must permit exit by paying principal and proportionate APR without penalty; a reasonable one-time processing fee may be retained if disclosed in the KFS.
What the customer or business should understand
- RBI’s digital-lending framework requires the regulated entity to provide a Key Fact Statement before execution of the loan contract.
- The KFS should disclose the annual percentage rate and charges so the borrower can compare the all-inclusive cost.
- Disbursal and repayment should ordinarily flow directly between the borrower and regulated entity accounts, subject to specified exceptions.
- A cooling-off period must permit exit by paying principal and proportionate APR without penalty; a reasonable one-time processing fee may be retained if disclosed in the KFS.
- The regulated entity remains responsible for its lending service provider and app.
The five-point review
| Check | What to examine |
|---|---|
| Lender | Legal name, RBI-regulated status and grievance officer. |
| KFS | APR, fee, instalment, tenor and recovery. |
| Money flow | Disbursal account and repayment beneficiary. |
| Exit | Cooling-off period and retained disclosed fee. |
| Data | Permissions, vendors and consent. |
Practical example
An app advertises 1% per month but the KFS shows processing fees and an APR much higher than 12%. The borrower should compare APR, not multiply the headline monthly number alone.
How to apply the framework
Download documents before accepting. Some apps make documents harder to access after disbursal.
Check the repayment beneficiary every time. A recovery caller’s personal QR code is not a substitute for the lender’s authorised channel.
Dispute workflow
Classify the problem before choosing the remedy
Identify the regulated entity, transaction or loan account, date, amount, contractual document and exact failure. Review lender, kfs and money flow together. A failed transaction, authorised mistake, unauthorised fraud, merchant dispute, credit-report error and lawful account freeze require different remedies.
Create one written chronology
Record the event, alert, discovery, first report, complaint number, response and financial impact in date order. Attach only the documents that prove each step. Phone calls can stop urgent harm, but a written acknowledgement creates the escalation record.
Escalate to the correct authority
Start with the bank, card issuer, lender, credit institution, app or other regulated entity responsible for the service. Use cybercrime or law-enforcement channels for suspected fraud. Use RBI CMS only after the regulated entity process satisfies the Scheme’s timing or rejection condition and the issue is within Ombudsman scope.
Implementation checkpoint
Before treating the case as closed, verify the actual bank statement, loan ledger, credit report, account status or merchant refund rather than relying only on a ticket message. Record who confirmed the financial outcome, the date, remaining open amount and the next escalation deadline. This final check prevents a complaint from being marked resolved while the money, lien, overdue status or credit record remains unchanged.
Action checklist
- Verify the regulated lender.
- Read and save the KFS.
- Compare APR and total repayment.
- Check cooling-off terms.
- Confirm direct money flow.
- Review permissions and grievance route.
Evidence to keep
- KFS and sanction
- Loan agreement
- Disbursal/repayment bank record
- Cooling-off request
- App permission screenshots and complaints
Warning signs
- App hides lender name
- Loan credited from unrelated account
- Repayment to personal UPI
- No downloadable KFS
- Permission to contacts and files without need
Finin2min takeaway
Banking disputes are resolved through classification, speed, written evidence and the correct escalation route. No legitimate bank, regulator or recovery process requires disclosure of an OTP, UPI PIN or remote-control access.
Frequently asked questions
What is APR?
The annual percentage rate expresses the annualised cost including applicable charges under the framework.
Can a processing fee be retained in cooling-off?
A reasonable one-time fee may be retained if disclosed in the KFS.
Is every credit-card EMI a digital loan?
RBI FAQs distinguish card EMI programmes governed by the card directions.
Who is responsible for the app?
The regulated entity remains responsible for its LSP/DLA arrangements.