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.
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