The much awaited final guideline on the treatment of P2P lending is set to be announced and the notification per se the treatment as NBFC is just a precursor . As per a notification released today peer to peer lending in India shall be regulated by RBI.
In accordance with the RBI, P2P lending is a crowd funding source which is paid back together with interest. Unsecured loans are on offer the online platform that matches the borrower with the lender. For you to become a part of the P2P lending, you need to register as the lender.
Fees or Interest rate is paid by both the parties on the marketplace; borrowers pay the amount as origination fee which is either a flat rate or a % of the amount raised as loan depending on their risk profile
"The Reserve Bank of India, on being satisfied that it is necessary to do so, in exercise of the powers conferred on it by... the Reserve Bank of India Act 1934, (2 of 1934) with prior approval from the government, hereby specifies, a non-banking institution that carries on the business of a peer to peer lending platform to be a non-banking financial company," the gazette notification sent by RBI to the government stated.
P2P lending is expected to provide finance means to unorganized segments and also soften rates owing to operational costs as well as competition.
Know how retired individuals can use P2P to increase their returns, here.