RBI caps lending on P2P platforms at Rs 50 lakh to shield consumer interest
PTI, Dec 24, 2019, 11:41 AM IST
Mumbai: To protect consumers interest, the Reserve Bank on Monday said that on a peer-to-peer lending (P2P) platform the permissible exposure of a lender to all borrowers should not exceed Rs 50 lakh at any given point of time.
“On a review, 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 RBI said in a notification.
The lender investing more than Rs 10 lakh across P2P platforms will produce a certificate to P2P platforms from a practising Chartered Accountant certifying minimum net-worth of Rs 50 lakh.
“Further, all the lenders shall submit 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,” the RBI said in a notification.
On fund transfer mechanism, it said: “Escrow accounts to be operated by bank promoted trustee for transfer of funds need not be mandatorily maintained with the bank which has promoted the trustee.”
As per the guidelines, the transfer of funds under P2P lending happens through an escrow account mechanism, which is operated by a bank promoted trustee.
It requires at least two escrow accounts, one for funds received from lenders and pending disbursal, and the other for collections from borrowers, be maintained.
It also mandates that all the transactions through bank accounts, and cash transaction are strictly prohibited.
Udayavani is now on Telegram. Click here to join our channel and stay updated with the latest news.
Top News
Related Articles More
NSE, BSE to be closed on Nov 20 for Maharashtra assembly polls
Sensex, Nifty fall for 2nd day on FII selling; RIL, ICICI Bank major drag
Sensex, Nifty fall over 1 pc, snap two-day rally ahead of US Fed interest rate decision
SC orders liquidation of grounded air carrier Jet Airways’ assets
Home-cooked meals become dearer in October on costlier vegetables
MUST WATCH
Latest Additions
BCCI vs PCB spar on CT venue as Naqvi denies receiving any official note from Indian board
Use Carnatic music to promote Kannada language: Nirmala Sitharaman
Udupi: Car collides with bike; Rider injured
UP women’s body proposes men shouldn’t tailor women’s clothes or cut their hair
NSE, BSE to be closed on Nov 20 for Maharashtra assembly polls
Thanks for visiting Udayavani
You seem to have an Ad Blocker on.
To continue reading, please turn it off or whitelist Udayavani.