The Statement on Developmental and Regulatory Policies dated 05 December, 2019 has been issued by the RBI pursuant to the fifth bi-monthly Monetary Policy Committee meeting.
Some quick updates and highlights of regulatory changes are given below –
1) Review of NBFC-P2P Directions- Aggregate Lender Limit and escrow accounts
Current limit for borrowers and lenders across all P2P platforms is ₹10 lakh, and exposure of a single lender to a single borrower is – ₹50,000 across all NBFC-P2P platforms.
It has been decided that in order to give the next push to the lending platforms, 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 ₹50 lakh.
Further, it is also proposed to do away with the current requirement of escrow accounts to be operated by bank promoted trustee for transfer of funds having to be necessarily opened with the concerned bank. This will help provide more flexibility in operations. Necessary instructions in this regard will be issued shortly.
2) The ‘On tap’ Licensing Guidelines for Small Finance Banks have now been finalised and are being issued today.
3). New Pre-Paid Payment Instruments (PPI)
It is proposed to introduce a new type of PPI which can be used only for purchase of goods and services up to a limit of ₹10,000. The loading / reloading of such PPI will be only from a bank account and used for making only digital payments such as bill payments, merchant payments, etc. Such PPIs can be issued on the basis of essential minimum details sourced from the customer. Instructions in this regard will be issued by December 31, 2019.
4) Development of Secondary Market for Corporate Loans – setting up of Self Regulatory Body
As recommended by the Task Force on the Development of Secondary Market for Corporate Loans, the Reserve Bank will facilitate the setting up of a self-regulatory body (SRB) as a first step towards the development of the secondary market for corporate loans. The SRB will be responsible, inter-alia, for standardising documents, covenants and practices related to secondary market transactions in corporate loans and promoting the growth of the secondary market in line with regulatory objectives.
Watch out for detailed articles on these topics to be published on our website soon.