The Reserve Bank of India through its Notification dated 23rd December 2019 has amended its earlier Master Directions on Non-Banking Financial Company- Peer to Peer Lending Platform (Reserve Bank) Directions 2017. These directions shall be applicable to every Non-Banking Financial Company(NBFC) and provides a framework for registration and operation of NBFC-P2Ps in India.
The RBI Directions comes after a review made on the above master directions, through which it has been decided that the aggregate exposure of a lender to all borrowers at any point of time, across all P2P platforms, shall be subject to a cap of Rs 50,00,000 provided that such investments of the lenders on P2P platforms are consistent with their net-worth.
The lender investing more than Rs10,00,000 across P2P platforms shall produce a certificate to P2P platforms from a practicing chartered accountant certifying minimum net-worth of Rs50,00,000. Further, all the lenders should submit a declaration to P2P platforms that they have understood all the risks associated with lending transactions and that P2P platform does not assure return of principal/payment of interest.
Further, the fund transfer between the participants on the peer to peer lending platform shall be through Escrow accounts which will be operated by bank promoted trustee.
Account for transfer of funds need not be mandatory maintained with the bank which has promoted the trustee.
Click here to read the Notification.
