Mumbai: The Reserve Bank of India (RBI) on Friday tightened norms for Non Banking Financial Company-Peer to Peer Lending Platforms (NBFC-P2P Lending Platform) as it found some of these platforms violating its rules.
The RBI in a notification said that the violations included among others, violation of the prescribed funds transfer mechanism, promoting peer to peer lending as an investment product with features like tenure linked assured minimum returns, providing liquidity options and at times acting like deposit takers and lenders instead of being a platform. Such violations, when observed, have been dealt with bilaterally by the Reserve Bank of India for remediation, said the central bank.
As per the revised master direction issued by the RBI the revised norms come into effect immediately. According to the new norms, a P2P platform should not promote peer-to-peer lending as an investment product with features like tenure-linked assured minimum returns, liquidity options, etc. Similarly, NBFC-P2P Lending Platform should not cross-sell any insurance product also, which is in the nature of credit enhancement or credit guarantee, it said.
No loan should be disbursed unless the lenders and the borrowers have been matched/mapped as per the board-approved policy framed, it added.
The RBI issued guidelines for P2P lending in 2017. P2P lending platform acts as an intermediary providing an online marketplace/platform to the participants involved in peer-to-peer lending.
