Lenders and borrowers cannot have exposure of more than Rs 10 lakh on peer-to-peer platforms, the RBI said today.
The Reserve Bank today came out with master directions for peer-to-peer (P2P) lending, a form of crowd funding to raise loans, that were keenly awaited after the segment was granted NBFC status last month.
"The aggregate exposure of a lender to all borrowers at any point of time, across all P2Ps, shall be subject to a cap of Rs 10 lakh.
"The aggregate loans taken by a borrower at any point of time, across all P2Ps, shall be subject to a cap of Rs 10 lakh," the RBI said.
Besides, the exposure of a single lender to the same borrower cannot go beyond Rs 50,000 under the prudential norms for the sector under the master directions issued today.
The Non-Banking Financial Company Peer to Peer Lending Platform (Reserve Bank) Directions, 2017, have come into force with immediate effect.
The maturity of the loans shall not exceed 36 months.
Among the scope of activities, RBI said NBFC-P2P shall act as an intermediary as an online marketplace to participants involved in peer to peer lending and should not raise deposits or lend money on its own.
They cannot provide or arrange any credit enhancement or credit guarantee, cannot facilitate or permit any secured lending linked to its platform, and only clean loans will be permitted.
Besides, they cannot sell any product except for loan specific insurance products, should not permit international flow of funds and their data should be located only on servers located in India.
On fund transfer mechanism, RBI said it should be done through an escrow account to be operated by a trustee.
"At least two escrow accounts, one for funds received from lenders and pending disbursal, and the other for collections from borrowers, shall be maintained," it said.
All fund transfers shall be through and from bank accounts and cash transaction is strictly prohibited, it added.
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