RBI releases norms for P2P lending cos

MUMBAI: RBI capped the exposure for both lenders and borrowers in peer-to-peer (P2P) lending platforms at ₹10 lakh. RBI announced its operational guidelines and prudential norms for such platforms on Wednesday.

The guidelines come into force with immediate effect.

A lender cannot have an exposure of more than ₹50,000 to a single borrower across P2P platforms and the tenure of the loans cannot exceed 36 months.

This capping of limits has come as a surprise for the industry.

“The exposure limit of ₹10 lakh for a lender has come as a surprise to us. There are investors who are keen to put in more money,” said Bhuvan Rustagi, co-founder and chief operating officer of Lendbox, a Delhi-based P2P platform.

The regulator also prohibited P2P platforms to accept any deposits or offer credit guarantees. P2P firms will not be allowed to lend from their own books and loan disbursal can be done only after the lender has given his consent to lend to the borrower.

All P2P platforms will have to register with the banking regulator and will need minimum netowned funds of ₹2 crore, the norms said. New P2P lending entities can start their business only after registering with RBI.

RBI also requires the P2P platforms to have at least two escrow accounts –one for receiving of funds from lenders and another one for collection of the outstanding amount from the borrowers.