With the RBI regulations on P2P lending already finalised, the central banking institution is reportedly looking to allow players in this segment to operate in the offline space as well. The move, sources believe, is aimed at facilitating financial inclusion in the country.
According to the guidelines highlighted in the 2016 consultation paper, P2P lending portals run by individuals, proprietorship, partnership, or Limited Liability Partnerships should adopt a company structure.
As explained by the Reserve Bank of India in the paper, “The notification can, therefore, specify that no entity other than a company can undertake this activity. This will render such services provided under any other organisational structure illegal. Alternatively, the other forms of the structure may be regulated by the State Governments.”
To attract more players into the country’s booming P2P space, the RBI is also considering allowing entities other than the ones registered under the Companies Act to enter the sector.
According to one source, the decision to permit offline P2P lending activities is modelled after the structure of chit fund companies. The move could ultimately facilitate peer-to-peer transactions, especially for users without proper access to online platforms. The end goal is to enhance financial inclusion.
In the last 10 years, technological innovations have paved the way for a myriad of alternative fintech models that strive to bridge the fast-widening gap between traditional banking institutions and fund seekers.