RBI Tightens Norms For NBFC-P2P Lending Platforms

RBI Tightens Norms For NBFC-P2P Lending Platforms

SUMMARY

The RBI cited certain practices adopted by NBFC-P2P platforms such as violation of the prescribed funds transfer mechanism, among others, for tightening the rules

No loan will be disbursed unless the lenders and the borrowers have been “matched/mapped” as per the platform’s board-approved policy, the central bank said

The RBI issued guidelines for P2P lending in 2017 to provide a framework for the registration and operation of NBFC-P2Ps in India

In a bid to crack the whip on violations and foster compliance, the Reserve Bank of India (RBI) on Friday (August 16) modified the master directions (MD) for non-banking financial company-peer to peer (NBFC-P2P) lending platforms. 

In a notification, the RBI said that it tightened the norms to curb certain practices adopted by NBFC-P2P platforms such as violation of the prescribed funds transfer mechanism, promoting P2P lending as an investment product with features like tenure linked assured minimum returns, among others. 

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