Banking & Finance MCQs

The new guidelines aim to enhance transparency in digital lending operations and strengthen consumer protection measures for borrowers dealing with NBFCs.

The Reserve Bank of India's new digital lending guidelines for NBFCs were mandated to be effective from August 2026.

The RBI uses the repo rate as a tool to manage inflation by influencing liquidity in the banking system. Maintaining it at a suitable level aims to achieve price stability while supporting economic growth.

The Monetary Policy Committee (MPC) is responsible for setting the policy repo rate, which is a key tool for managing inflation and economic growth in India.

In its August 2026 policy review, the Reserve Bank of India's Monetary Policy Committee decided to keep the policy repo rate unchanged at 6.5%.

To ensure credibility and transparency, the framework mandates that the allocation of proceeds to eligible green projects and their environmental impact be reviewed and assured by a qualified and independent external reviewer or verifier.

A crucial aspect of the SGB framework is the 'Use of Proceeds,' which mandates that funds raised must be allocated to eligible green projects that contribute to environmental sustainability and have clearly defined environmental objectives.

Sovereign Green Bonds are specifically designed to raise capital for projects that have positive environmental and climate outcomes, aligning with national and international sustainability goals.

The RBI's guidelines emphasize that if DLAs engage third-party agents for recovery, they must ensure these agents strictly adhere to the Fair Practices Code to protect borrower interests and prevent harassment.

The RBI's updated guidelines mandate that Digital Lending Apps (DLAs) must provide a clear and comprehensive summary of the loan, including all key terms and conditions, to the borrower within 24 hours of loan disbursal.