As per the new Digital Lending Guidelines issued by the RBI in 2026, which of the following entities are NOT permitted to undertake digital lending activities?
A Scheduled Commercial Banks
B Non-Banking Financial Companies (NBFCs)
C Payment System Providers (PSPs) not regulated by RBI
D Small Finance Banks
Answer: C
The RBI's new digital lending guidelines, effective from 2026, mandate that only entities regulated by the RBI, such as Scheduled Commercial Banks, NBFCs, and Small Finance Banks, can undertake digital lending. Payment System Providers not regulated by the RBI are explicitly excluded.
142.
In Q1 FY27, which of the following indicators suggested that Indian Public Sector Banks were strengthening their financial resilience?
A A decrease in their market capitalization.
B An increase in their Capital Adequacy Ratio (CAR).
C A rise in their Net Interest Margins (NIMs) due to higher lending rates.
D A reduction in their customer base.
Answer: B
A higher Capital Adequacy Ratio (CAR) indicates that banks have a stronger buffer to absorb potential losses, thereby enhancing their financial resilience and ability to lend.
143.
The robust Q1 FY27 performance of Indian Public Sector Banks was largely driven by which of the following factors?
A A significant decrease in operational costs.
B Strong credit growth coupled with controlled provisioning.
C A sharp decline in deposit rates.
D Increased government capital infusion.
Answer: B
Robust credit growth indicates increased lending activity, while controlled provisioning (setting aside funds for potential loan losses) suggests confidence in asset quality, both contributing to better profitability.
144.
Which key financial metric, often indicating asset quality, showed significant improvement for most Indian Public Sector Banks (PSBs) in Q1 FY27?
A Net Interest Margin (NIM)
B Gross Non-Performing Assets (GNPAs) ratio
C Return on Assets (ROA)
D Capital Adequacy Ratio (CAR)
Answer: B
A declining Gross NPA ratio signifies improved asset quality, which was a notable trend reported for PSBs in Q1 FY27, reflecting better credit management and recovery efforts.
145.
According to the RBI's 2026 digital lending regulations, what is the stipulated period within which a digital lending entity must provide a cooling-off period to borrowers?
A A minimum of 7 days.
B A minimum of 3 days.
C A minimum of 5 days.
D The cooling-off period is optional and not mandated.
Answer: B
The RBI guidelines mandate a cooling-off period of at least 3 days for digital loans, allowing borrowers to reconsider their decision without penalty.
146.
The RBI's enhanced digital lending guidelines, effective from 2026, aim to protect consumers primarily by addressing which of the following concerns?
A Excessive interest rates and hidden charges.
B Lack of standardized loan application processes.
C Limited availability of digital lending platforms.
D Insufficient credit scoring mechanisms.
Answer: A
A major focus of the stricter digital lending guidelines is to curb predatory lending practices, including exorbitant interest rates and opaque fee structures, thereby safeguarding consumer interests.
147.
As per the stricter digital lending guidelines unveiled by the RBI in 2026, which of the following is NOT a mandatory requirement for entities engaging in digital lending?
A Obtaining a Certificate of Registration (CoR) from the RBI.
B Disclosing all-in-cost of loans to borrowers upfront.
C Appointing a Chief Compliance Officer (CCO) with at least 10 years of experience.
D Ensuring that the loan agreement is in a standard format prescribed by the RBI.
Answer: C
While the RBI guidelines emphasize robust compliance and transparency, the specific requirement of a CCO with 10 years of experience is not explicitly mandated in the general guidelines for all digital lending entities. Other options are key components of the stricter regulations.
148.
Which of the following is a mandatory requirement for digital lending platforms under RBI guidelines regarding data privacy?
A Storing all borrower data on servers located outside India to ensure global access.
B Obtaining explicit consent from borrowers for all data collection, storage, and usage, with clear purpose disclosure.
C Sharing borrower data with third-party marketing agencies without requiring explicit consent.
D Deleting all borrower data immediately after loan repayment, regardless of legal or regulatory retention requirements.
Answer: B
The RBI guidelines on digital lending place a strong emphasis on data privacy. Digital lenders must obtain explicit consent from borrowers for all data collection, storage, and usage, clearly stating the purpose. They are also restricted from accessing mobile phone resources like contacts or call logs without explicit, informed consent.
149.
According to RBI's digital lending guidelines, what must a Digital Lending App (DLA) prominently disclose to the borrower before loan disbursement?
A The personal contact details of the app's CEO.
B The name of the Regulated Entity (RE) on whose behalf the loan is being offered, along with the Annual Percentage Rate (APR) and all fees.
C The daily stock market performance and investment tips.
D The political affiliations of the lending platform's board members.
Answer: B
A key requirement of the RBI's digital lending guidelines is transparency. DLAs must clearly disclose the name of the Regulated Entity (bank/NBFC) extending the loan, the Annual Percentage Rate (APR), and all associated fees and charges upfront to the borrower.
150.
What is the primary objective of the Reserve Bank of India's new guidelines for digital lending platforms?
A To encourage the rapid growth of unregulated digital lending apps.
B To protect borrowers from unethical lending practices, enhance transparency, and ensure fair practices.
C To promote the use of cryptocurrency for all digital loan disbursements.
D To reduce the operational costs for digital lenders by simplifying compliance.
Answer: B
The RBI's digital lending guidelines, introduced in 2022, aim to protect borrowers from predatory lending, ensure transparency in loan terms, and establish a robust regulatory framework for digital lending activities, addressing concerns related to data privacy, unfair practices, and recovery methods.
