Reserve Bank of India, vide notification No. DNBR.
045/CGM (CDS)-2017 has specified that an institution that carries on ‘the
business of a peer to peer lending platform’ shall be a Non-Banking Financial
Company.
045/CGM (CDS)-2017 has specified that an institution that carries on ‘the
business of a peer to peer lending platform’ shall be a Non-Banking Financial
Company.
The term “the business of a peer to peer lending platform”
shall mean the business of providing under a contract, the service of loan
facilitation, via online medium or otherwise, to the participants who have
entered into an arrangement with that platform to lend on it or to avail of
loan facilitation services provided by it.
shall mean the business of providing under a contract, the service of loan
facilitation, via online medium or otherwise, to the participants who have
entered into an arrangement with that platform to lend on it or to avail of
loan facilitation services provided by it.
RBI had earlier released a consultation
paper on P2P lending platforms where the central bank had proposed certain
minimum eligibility criteria for registration of such platforms which were
necessary in public interest and for regulation of such platforms.
paper on P2P lending platforms where the central bank had proposed certain
minimum eligibility criteria for registration of such platforms which were
necessary in public interest and for regulation of such platforms.
Recognition of the P2P platforms as an NBFC has
been a long standing demand of the industry and it provides a lot of clarity on
how to run the business.
Peer to peer investment is the process when an investor directly invest into the need of an other. Typically this type of investment is reserved investors who wants to invest into a fund who in turn borrower the money as a personal loan to somebody who needs the money.