Workshop on Co-lending and Loan Partnering
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Open in new tab Survival at Stake? The impact of RBI’s Norms on P2P Lending Platforms
Dayita Kanodia and Manisha Ghosh l finserv@vinodkothari.com
Introduction
RBI on August 16, 2024 has issued a notification for the review and modification of Master Direction – Non-Banking Financial Company – Peer to Peer Lending Platform (Reserve Bank) Directions, 2017 (‘Directions’) for platforms acting as intermediaries and providing an online marketplace for lending between peers.
The review has been carried out pursuant to observations that some of these platforms have adopted certain practices which are violative of the said Directions. These practices include, among others, violation of the prescribed funds transfer mechanism, promoting peer to peer lending as an investment product with features like tenure linked assured minimum returns, providing liquidity options and at times acting like deposit takers and lenders instead of being a platform.
Read more →FAQs on Co-lending
Team Finserv l finserv@vinodkothari.com
Loading…Offline Payment aggregators to be under regulatory scheme: RBI proposes amendments to PA regime
Archisman Bhattacharjee and Manisha Ghosh I finserv@vinodkothari.com
Introduction
On April 16, 2024, the Reserve Bank of India (RBI) issued Draft Directions on the Regulation of Payment Aggregators (PAs) (‘Draft PA Directions’) serving two primary purposes:
- Regulating Offline PAs i.e. PAs operating at physical points of sale, an area previously not covered by existing regulations.
- Amendments to the current guidelines concerning Payment Aggregators, primarily intended to extend the scope of the extant regulations to offline PAs; however, having several additionalities such as PA’s due diligence on the merchants, ongoing merchant monitoring based on business profile, disallowing payment to any other account on specific directions from the merchant etc.
Introducing Financial Services on ONDC: Opportunities & Challenges for Digital Lenders
– Shreshtha Barman | finserv@vinodkothari.com
Read more →Snippet on Regulation of Payment Aggregator – Cross Border
Digital Personal Data Protection Bill 2023: Analysing the Impact on Digital Lenders
– Subhojit Shome, Assistant Manager | subhojit@vinodkothari.com
Click here to view our: Consultancy and advisory services on Digital Personal Data Protection Act, 2023
Loading…Consultation paper on the proposed IFSCA (Payment Services) Regulations, 20XX: An Analysis
By Anirudh Grover, Executive, finserv@vinodkothari.com
The International Financial Services Centre Authority in an attempt to restructure the regulatory overview of the Payment Services segment in GIFT IFSC has issued a Consultation Paper dated June 13, 2023 (‘CP’), along with the draft regulations that will be applicable to the payment services market in GIFT IFSC. The aim of this write-up is to critically analyze the same with comparisons with the current RBI framework and similar guidelines practiced by regulators globally.
Read more →Inter-operable regulatory sandbox: A playground for fintechs ?
– Dayita Kanodia, Executive | finserv@vinodkothari.com
A regulatory sandbox allows live testing of innovative products/services under regulatory supervision and with regulatory relaxations. This in turn allows regulators to design evidence-based and innovation-friendly regulations.
An Inter-Operable Regulatory Sandbox or IoRS as defined by both RBI and SEBI is therefore a mechanism to facilitate testing of innovative hybrid financial products / services falling within the regulatory ambit of more than one financial sector regulator.
Read more →FAQs on Default Loss Guarantee in Digital Lending
An understanding of the Guidelines issued by RBI
(Updated as on April 29, 2024)
Team Finserv | finserv@vinodkothari.com
On September 02, 2022, the RBI issued the “Guidelines on Digital Lending” (“DL Guidelines”), which had essentially put a bar on “Loss sharing/ structured default guarantee arrangements” such as First Loss Default Guarantees, likening their nature to that of “synthetic securitisation” as defined under the Master Direction – Reserve Bank of India (Securitisation of Standard Assets) Directions, 2021 (“SSA Directions”). This caused a disruption in the digital lending industry as most of the arrangements ran on some form of loss-sharing arrangement. (Refer to our FAQs on the Digital Lending Guidelines here)
In its Statement on Developmental and Regulatory Policies dated June 8, 2023, the RBI announced its intention to issue a regulatory framework for permitting Default Loss Guarantee arrangements in Digital Lending[1]. The same day, the Guidelines on Default Loss Guarantee (DLG) in Digital Lending have been issued by the regulator (‘DLG Guidelines’).
We have developed a set of FAQs on the DLG Guidelines, where we intend to answer some of the critical questions relating to the default guarantee arrangements. The FAQs were updated based the RBI FAQs on DLG Guidelines (‘RBI FAQs) issued on Apr 26, 2024.
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