After the Reserve Bank of India (RBI) released guidelines for entities engaged in peer-to-peer (P2P) lending last week, an association of such entities is planning to ask the central bank to clarify whether institutions will be allowed to lend through P2P platforms.
According to sources, the industry group, called Association of P2P Platforms, is comprised of five entities and will write to RBI after getting itself registered this month.
On October 4, RBI had released master directions for non-banking financial company-peer to peer lending platforms (NBFC-P2Ps), where lenders and borrowers are described as ‘participants’, without being identified as individuals and/or institutions.
A top executive with one of the five P2P lending platforms told FE that the industry is unsure of whether ‘participant’ covers only individuals or institutions as well. “If we look at it in government sources, such as MCA (ministry of corporate affairs) or the finance ministry, the definition of ‘person’ doesn’t cover institutions or a group of people. But, when it comes to RBI regulations, in their regulations on wallets, they have clearly identified ‘person’ to mean all kinds of entities – individuals, groups of people as well as institutions,” he said.
‘Crisil withdraws proposal to enter P2P biz’
Credit rating agency Crisil has withdrawan its application to enter peer-to-peer lending business, the Department of Economic Affairs said on Tuesday. DEA, in the finance ministry, also said it has disposed of six FDI proposals aggregating to foreign investment of `85.45 crore during September. Crisil has withdrawan the proposal for “undertaking peer-to-peer lending platform business by itself or through one of its subsidiaries”, DEA said in a statement without assigning any reason.
Majority owned by S&P Global Inc, Crisil is a analytical company providing ratings, research, and risk and policy advisory services. A lender on peer-to-peer platform, a form of crowd funding to raise loans, cannot have exposure of more than `10 lakh as loan, while a borrower cannot also have debt exposure by the same quantum.
(With PTI inputs)