To assess and regulate peer-to-peer (P2P) lending platforms, the Reserve Bank of India (RBI) has asked all registered lenders to publish quarterly reports.
The central bank has sought key information such as details of borrowers, lenders, their financial profiles, participant’s total exposure and the financial health of
the lending platforms.
RBI has given two weeks time to these firms to respond in this regard.
RBI is now devising this quarterly reporting feature for the P2P lending space as well, showing that they are keeping a close eye on the space, said a person close to the development.
P2P lenders, help borrowers get loans without collateral at rates higher than what traditional banks offer.
In October 2017, the central bank had devised regulations for P2P startups categorising them as non-banking financial companies (NBFCs).
As per the regulation, P2P platforms can act as intermediaries. They are not allowed to raise deposits and not lend on their own. They cannot provide or arrange any credit guarantee, not facilitate or permit any secured lending linked to their platform. These platforms are allowed to cross-sell only loan-specific insurance for lending.
The RBI has capped the exposure of a lender at Rs 10 lakh. However, many P2P firms expressed unhappiness over the provisions saying it would hamper the nascent industry.
At present, P2P firms rely on self-declaration to remain in compliance with the RBI.
Indian P2P lending industry, which is around 6 years old, disburse around Rs 350 crore every year. The market is estimated to grow 20 percent monthly.
While there are around 20 P2P lending firms in the country, RBI has registered 11 firms as P2P lending NBFCs. In January, two Fintech firms RupeeCircle and IndiaMoneyMart got the NBFC licenses.
Platforms like Faircent, Lendbox, LendenClub, and i2iFunding are major players in the segment.
The development was reported by ET.