India’s digital-lending ecosystem expanded rapidly over the past decade, delivering credit at speed and scale but exposing borrowers to consumer-protection failures: hidden charges, harassment by recovery agents, data misuse, and asset-classification issues. This paper assesses the effectiveness of (a) regulatory caps and limits introduced so far, (b) grievance-redressal mechanisms available to borrowers, and (c) the formation and recognition of NPAs for digital loans. The study synthesizes official data and policy documents (RBI, Ministry reports, Ombudsman scheme), and recent academic and practitioner literature to identify regulatory gaps and propose actionable reforms. Key findings: RBI’s layered interventions (Working Group 2021; Digital-Lending Guidelines 2022–23; Directions 2025) materially improved transparency and introduced controls (e.g., limits on Default-Loss-Guarantee exposures), but enforcement, data sharing across agencies, and borrower awareness remain weak — leaving room for statutory clarifications, stronger oversight of intermediaries (LSPs), and improved grievance escalation.