EVALUATING THE FINANCIAL IMPLICATIONS OF DIGITAL LENDING IN INDIA’S COMMERCIAL BANKS

Abstract

Digital lending has revolutionized India's financial landscape by leveraging finance technology, artificial intelligence, and analytics to enhance access to credit and the efficiency of banking operations. The paper analyzes the financial impact of digital lending in India's commercial banks from the perspective of loan origination, credit risk management, operational cost, and customer satisfaction. Survey research design was employed, collecting data from 1,000 participants comprising banking staff and clients. Statistical procedures such as correlation analysis, ANOVA, and one-sample T-tests were applied in the analysis of findings. Findings indicate that online lending has played a significant role in enhancing efficiency, reducing loan processing time, and minimizing operational expenses compared to traditional lending procedures. Cybersecurity threats, compliance, and financial literacy are still issues of concern. The study further concludes that electronic lending supports credit risk management using AI-driven risk evaluations and forecast analysis in the hope of keeping Non-Performing Assets (NPAs) in check. Customer satisfaction regarding digital banking offerings was also in a huge majority, though security remains a disputable matter. The report summarizes that although digital lending has transformed India's banking sector, efforts still need to be made to further improve regulatory frameworks, cybersecurity infrastructure, and financial literacy initiatives to make it long-term sustainable and inclusive.