{"id":22845,"date":"2024-04-27T05:29:16","date_gmt":"2024-04-26T23:59:16","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=22845"},"modified":"2025-10-03T12:04:43","modified_gmt":"2025-10-03T06:34:43","slug":"lending-service-providers-lsp","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/lending-service-providers-lsp\/","title":{"rendered":"What are Lending Service Providers (LSPs)?"},"content":{"rendered":"<h2>About Lending Service Providers (LSPs)<\/h2>\n<ul>\n<li>LSPs are <strong>engaged by<\/strong> the <strong>Regulated Entities<\/strong> (REs) (banks or NBFCs) to carry out some functions of RE in connection with<strong> lenders\u2019 functions on digital platforms<\/strong>.<\/li>\n<li>The LSPs generally, <strong>under an outsourcing arrangement,<\/strong> offer their services to REs for a fee or commission.<\/li>\n<li><strong>RBI defines<\/strong> an LSP as an <strong>agent of an RE<\/strong> that carries out one or more <strong>functions of the lender, including customer acquisition<\/strong>, <strong>underwriting support<\/strong>, pricing support, disbursement, servicing, monitoring, collection, and <strong>loan recovery on behalf of the RE<\/strong>.<\/li>\n<li>In simple terms, <strong>LSPs are loan aggregators<\/strong> which <strong>provide loans from their partner REs<\/strong>.<\/li>\n<li>In some cases, a<strong> RE can also act as an LSP.<\/strong><\/li>\n<li>They are <strong>technology-centric entities<\/strong> which <strong>have the client reach<\/strong> and are thus capable of <strong>offering a marketplace<\/strong> for both lenders and borrowers.<\/li>\n<\/ul>\n<p>LSPs <strong>entail aggregation of loan offers<\/strong> from multiple lenders on an electronic platform, which <strong>enables the borrowers to compare and choose the best<\/strong> available option to avail a loan from one of the available lenders.<\/p>\n<hr \/>\n<h2>Q1: What is a Non-Banking Financial Company (NBFC)?<\/h2>\n<p>An <a href=\"https:\/\/vajiramandravi.com\/current-affairs\/what-is-a-non-banking-financial-company-nbfc\/\" target=\"_blank\">NBFC<\/a> is a company registered under the Companies Act 1956 engaged in the business of loans and advances, acquisition of shares\/stocks\/bonds\/debentures\/securities issued by the Government or local authority or other marketable securities of a like nature. They offer various banking services but do not have a banking license. They provide banking services like loans, credit facilities, TFCs, retirement planning, investing and stocking in the money market. Generally, these institutions are not allowed to take traditional demand deposits\u2014readily available funds, such as those in checking or savings accounts\u2014from the public. NBFCs are regulated by the Reserve Bank of India (RBI), the central bank of India.<\/p>\n<p><strong>Source: <\/strong><a href=\"https:\/\/www.businesstoday.in\/industry\/banks\/story\/rbi-releases-draft-regulation-for-web-aggregation-of-loan-products-in-digital-lending-427138-2024-04-26\" target=\"_blank\" rel=\"nofollow noopener\"><strong>RBI releases draft regulation for web aggregation of loan products in digital lending<\/strong><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Lending Service Providers are engaged by the Regulated Entities (REs) (banks or NBFCs) to carry out some functions of RE in connection with lenders\u2019 functions on digital platforms.<\/p>\n","protected":false},"author":5,"featured_media":22846,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1],"tags":[],"class_list":{"0":"post-22845","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-upsc-prelims-current-affairs","8":"no-featured-image-padding"},"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/22845","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=22845"}],"version-history":[{"count":0,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/22845\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media\/22846"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=22845"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=22845"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=22845"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}