Context:
The Reserve Bank of India is considering establishing a Digital India Trust Agency (DIGITA) to combat cyber fraud and illegal lending apps.
Relevance:
Facts for Prelims
Dimensions of the Article:
- About Digital India Trust Agency (DIGITA)
- Understanding Digital Lending
About Digital India Trust Agency (DIGITA)
Role and Responsibilities:
- Tasked with preventing the emergence of illegal lending apps.
- Facilitates the verification of digital lending applications and maintains a public register of these verified apps.
Verification System:
- Apps verified by DIGITA will carry a “verified” tag.
- Any app lacking this verification will be deemed unauthorized.
Significance:
- Establishes a crucial checkpoint in combating online financial fraud.
Understanding Digital Lending
Definition:
- Digital lending refers to a remote and automated lending process primarily driven by advanced digital technologies.
Process and Parties Involved:
- Lending occurs through web platforms or mobile apps, leveraging technology across various stages such as customer acquisition, credit assessment, loan approval, disbursement, recovery, and customer service.
- Typically involves three entities: a lender, a lending service provider (including digital lending platforms), and a borrower.
Products and Features:
- Includes innovative financial products like Buy Now, Pay Later (BNPL).
- BNPL offers a financing option or short-term loan, allowing consumers to purchase products or avail services without immediate payment concerns.
-Source: Indian Express
