CHENNAI: With the number of peer to peer (P2P) lending platforms rising online, the Reserve Bank of India has proposed that they be registered as non-banking finance companies (NBFCs) to bring them under the purview of the regulator.
“In its nascent stage, this industry has the potential to disrupt the financial sector and throw surprises. A sound regulatory framework will prevent such surprises,” said the RBI while making its case for regulation in a consultation paper made public on Thursday.
Close to 20 new online P2P lending companies have been launched in last year RBI has proposed that they (platforms) must act only as intermediaries, limited to bringing the borrower and lender together, funds must move dir'ectly from the lender to the borrowers’ account, has prohibited cross-border transactions and giving any assured return, and recommended that these platforms have a minimum capital requirement of Rs.2 crore at the start.
However, the regulator has stayed away from suggesting any limits on amount and rate of lending. “If regulations are given out keeping in mind the interest of the consumers, they bring immense value like we have seen worldwide. As the discussion papers states it would allow borrowers to access loans at much lower costs or credit access to MSMEs,” said Rajat Gandhi, Founder and CEO, Faircent - a P2P lending platform.