Context:
The Reserve Bank of India (RBI) issued clarifications on the regulatory framework for Non-Banking Financial Company – Peer to Peer (NBFC-P2P) lending platforms, aiming to enhance transparency, protect customer funds, and ensure operational stability.
Key Highlights:
- Definition:
- A P2P lending platform is an online marketplace connecting borrowers (individuals/businesses) directly with investors/lenders, bypassing traditional banks.
- Leverage and Capital Requirements:
- Leverage ratio: Outside liabilities ÷ owned funds (excluding customer funds).
- Investible funds: Capital infused by promoters and business surplus; excludes lender/borrower funds.
- Minimum ₹2 crore capital required before issuance of Certificate of Registration (CoR).
- Operational Guidelines:
- Customer funds cannot be used by the platform.
- All loan disbursals and repayments must go through bank accounts of registered lenders and borrowers via escrow accounts.
- ‘T+1’ settlement refers to one bank working day.
- Eligibility:
- Existing NBFCs are not allowed to operate as NBFC-P2P entities.
Significance:
- Strengthens the integrity and transparency of P2P lending in India.
- Protects lenders’ and borrowers’ funds, ensuring financial discipline.
- Encourages regulated growth of alternative lending platforms in India.
