The Reserve Bank aims to keep a close check on peer-to-peer (P2P) lending, which has been booming globally, by stipulating that anyone looking to lend through such online platforms has to be a bank account holder. With banks enforcing stringent know your customer (KYC) norms, this should ensure that fund sources can be tracked and that the P2P route won’t be used to launder money.
This was one of the proposals made by RBI at a meeting between representatives of the P2P lending industry and a senior RBI official last Monday
While P2P lenders in India are currently unregulated, the RBI recently issued a consultation paper on rules for the sector and sought suggestions on this before May 31. The meeting was held as part of this exercise. P2P lenders are online platforms that bring together individuals who seek credit and investors ready to meet that demand
The platforms encourage a number of investors to come together and lend money to a single borrower. The rate of interest usually gets decided through reverse bidding.
The RBI wants to make it mandatory that all transactions between borrowers and lenders are conducted through banks but the regulator is not to set an upper limit for the amounts that can be loaned through the platforms. The regulations will be aimed at simplifying the process of recognition for the newly emerging lending sector, experts said.
