PEER TO PEER LENDINGPEER TO PEER LENDING➢ P2P LendingP2P Lending

➢ On On online platformsonline platforms

➢ WithoutWithout the involvement of bank or finance the involvement of bank or finance companycompany

➢ Digital market placeDigital market place for for loansloans

HOW IT WORKS....HOW IT WORKS....

LENDERLENDER BORROWER

RISK INVOLVED...RISK INVOLVED... UnsecuredUnsecured loans loans

RiskRisk of default of default

Diversifying fundsDiversifying funds

P2P Lending in India...P2P Lending in India...✔ GoI notification:GoI notification: P2P Lending platforms – P2P Lending platforms –

treated as treated as Non Banking Financial CompaniesNon Banking Financial Companies (NBFCs)(NBFCs)

✔ Regulated by Regulated by RBIRBI

✔ RBI Guidelines: RBI Guidelines: Non-Banking Financial Non-Banking Financial Company – Peer to Peer Lending Platform Company – Peer to Peer Lending Platform (Reserve Bank) Directions, 2017(Reserve Bank) Directions, 2017

RBI Guidelines...RBI Guidelines...➔ Registration of the entitiesRegistration of the entities involved in P2P involved in P2P

lending :lending :

● Company incorporated in IndiaCompany incorporated in India

● Adequate capital structureAdequate capital structure

● Resources to offer the services....Resources to offer the services....

➔ P2P Platforms:

● Act as an intermediary

● Credit enhancement or credit guarantee

● Default related information on borrowers: credit bureaus.

● Credit information of the borrowers: lenders

RBI Guidelines...RBI Guidelines...

RBI Guidelines...RBI Guidelines...➔ Exposure limits:

● Aggregate exposure of a lender to all borrowers or aggregate loans taken by borrowers : 10 lakhs

● Exposure of a single lender to the same borrower not to exceed Rs 50,000

● Maturity of loan not to exceed 36 months

➔ Fund Tranfer :

● All transactions will take place : bank-to-bank transfers.

● Fund transfer between the participants through escrow accounts.

● International flow of funds

➔ Proper grievance redressal mechanism

➔ Data security

RBI Guidelines...RBI Guidelines...

HOW IT WORKS....HOW IT WORKS....

LENDERLENDER BORROWER

HOW IT WORKS....HOW IT WORKS....

LENDERLENDER BORROWER

HOW IT WORKS....HOW IT WORKS....

LENDERLENDER BORROWER

HOW IT WORKS....HOW IT WORKS....

LENDERLENDER BORROWER