In a bid to give lending platforms a bigger push, the Reserve Bank of India (RBI) has increased lending limit for Non-Banking Financial Company-Peer to Peer Lending platforms (NBFC-P2P) to Rs 50 lakh.
This comes as a major relief to P2P platforms, which have been requesting a revision in the lending cap to be able to grow faster and bring more high net worth individuals (HNIs) on board.
A P2P lending platform is one that connects those looking to borrow with lenders. These are generally unsecured, instant personal loans.
1960彩票平台,百人牛牛,彩票平台送18元Until now, the cap was at Rs 10 lakh. However, the exposure of a single lender to borrower is capped at Rs 50,000. This means that a lender on the P2P platform cannot lend more than Rs 50,000 to the same borrower across all P2P platforms at any point in time.
“A review of the functioning of the lending platforms and lending limit was carried out and it has been decided that in order to give the next push to the lending platforms, 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 lakh,” RBI said in its Statement on Developmental and Regulatory Policies.
RBI has also proposed to do away with the current requirement that escrow accounts to be operated by a bank-promoted trustee for transfer of funds having to be necessarily opened with the concerned bank. According to RBI, this will help provide more flexibility in operations.
An escrow account is an account where funds are held while two or more parties complete a transaction.
The Reserve Bank had issued directions for NBFC-P2P on October 4, 2017. At present, the aggregate limits for both borrowers and lenders across all P2P platforms stand at Rs 10 lakh.
The decision by RBI has received cheer from P2P lending platforms, who believe this will help boost the sector.
Bhavin Patel, Co-Founder and CEO, LenDenClub says that the new investment limit will HNIs to explore P2P lending as a new investment option.
“We welcome this move by RBI as P2P enters into a new era from today. Now, P2P lending stands equal against other investment options like MF, FD, Bonds, PMS etc. Majority of Indian investors will fall within this cap of Rs. 50 lakhs. Even a small exposure to P2P investment will improve HNIs’ portfolio-level returns. For existing investors, this will give them the ability to diversify more and earn more through p2p investments.”
1960彩票平台,百人牛牛,彩票平台送18元As per Keerthi Kumar Jain, founder of Anytime Loan, this move will unlock the huge savings potential of millions.
“It's a very positive move from RBI especially in today's economic status wherein banks, etc have tighten their strings and on other side reduced returns on FD. This move will truly unlock the huge savings potential of millions on one side and on other give access to formal credit to millions, thereby causing a positive ripple effect in overall economy,” he told TNM.
Abhishek Gandhi, co-founder & CFO, RupeeCircle said, "This move is a big positive for all P2P companies and investors and shows the RBI's trust and confidence in P2P lending to resolve the problem for existing credit gap in the market. The announcement should definitely attract more investors towards P2P platforms. Also, we expect the existing investors on our platform to scale up their investments further. Also, more HNIs would now look at P2P lending as an investment option, which is a very positive sign for the industry."