India is truly a digital-first economy, and technology can speed up the development of industries
and markets with phenomenal success. It can also allow for the rapid growth of unscrupulous
practices that can fall between regulatory grey areas. With recent strong growth in the digital
lending industry in India, there is a need for industry participants to maintain a strong code of
conduct in order to prevent the rise of unscrupulous practices that could cause harm to the
industry by reducing the confidence of customers, regulators and other market participants.
The purpose of this Code of Conduct is to ensure that the digital lending industry creates common
safeguards of customer interests and appropriately addresses the unique risks that might be
created through the mechanism of digital lending.
- This Code of Conduct is a set of principles, processes and guidelines that are binding on every member of the DLAI (“Member”) in order to ensure ethical and responsible behavior by all Members. This Code of Conduct applies to all Members.
- This Code of Conduct applies to Members in all their dealings, interactions, communications and transactions with any individual, person or business (“customer”) to whom any financial product or service is offered or provided by such Member through the use of any online technology.
- This Code of Conduct aligns with and is in addition to all laws and regulations applicable for lending
businesses, including all current regulations and directions issued by the Reserve Bank of India,
and by no means aims to override any applicable laws or regulatory guidance. When there is any
conflict or inconsistency between this Code of Conduct and any law or regulation, that law or
regulation will prevail.
- This Code of Conduct is subject to review by the Management Committee of DLAI (“Management Committee”) from time to time.
- Members are required to adhere to this Code of Conduct. Members should note that non - compliance with the Code of Conduct can result in Sanctions as detailed in Section 4 below.
Adherence & Supervision
- Members must agree, in writing, at the time of membership and renewal of membership, to
adhere to the Code of Conduct.
- Members will also be required to provide, in writing, their immediate acceptance of the Code of Conduct for continuation of their membership.
- Each Member will also, as part of its acceptance of the Code of Conduct, be deemed to have accepted and consented to DLAI’s right to apply and give effect to the Sanctions as set out in Section 4 below.
- Each Member will provide to DLAI the name of a person in its organisation who will be responsible
for reporting to DLAI on the adherence with the Code of Conduct (“Designated Compliance
Officer”). The Designated Compliance Officer will also be responsible for dissemination of this
Code of Conduct (as updated from time to time) within the Member’s organisation at frequent
intervals. The name of the Designated Compliance Officer will be kept on record of DLAI and will
be the contact point for all communications with the Member in relation to the Code of Conduct.
- Each Member must submit an annual confirmation to the Management Committee, in writing, on
its compliance with the Code of Conduct, in such form as the Management Committee may
require from time to time (“Annual Submission”). The Annual Submission will include a
certification by a director, company secretary or other key managerial personnel of the Member
that it is in compliance with the Code of Conduct. The Annual Submission will be required from
each Member in order to continue its membership and participation in DLAI activities.
- Members are encouraged to develop frequent training modules for periodic training of their staff,
agent and representatives on the Code of Conduct, as updated from time to time, and to inform
them of the repercussions of non-adherence to the Code of Conduct.
- The Management Committee will monitor compliance with the Code of Conduct by Members.
The Management Committee may constitute a monitoring committee for this purpose, and in
such event, all references to the Management Committee in this section will be mean a reference
to the monitoring committee.
- The Management Committee will notify a fair procedure for the admission of complaints against
any Member for the violation of the Code of Conduct, investigation and determination of violation
of the Code of Conduct, and the decision on an application of Sanctions against the non-compliant
Member after giving reasonable opportunity to such Member to make representations in such a
- Any decision taken by the Management Committee on a non-compliance with the Code of
Conduct will be binding on the relevant Member and will not be subject to appeal.
The Management Committee will be entitled to take the following action against a non-compliant
- Cancellation of its membership with DLAI;
- Bar the non-compliant Member from future membership of DLAI and/or participating in
its events and services for such a period of time as the Management Committee may
- Notify all other Members of the cancellation of the membership and debarment of the
non-compliant Member, and to also publish the fact of such cancellation and debarment
on the DLAI’s website;
- Report any serious violation of the Code of Conduct to the appropriate authorities,
including the Reserve Bank of India;
- Such other directions as the Management Committee may consider fit for ensuring
compliance with the Code of Conduct, including obtaining a binding commitment from
the Member to take necessary remedial steps for compliance with the Code of Conduct.
Promotion of the code of conduct
- Members should promote awareness about the Code of Conduct and support its monitoring and effectiveness.
- Members should display the Code of Conduct as part of their fair practices code (similar to Banks and NBFCs) and should make it be available to customers on the Members Website or App.
- Members and concerned persons may contact DLAI in respect to the implementation of the Code of Conduct at: