Earlier the online lending mechanism that matches borrower with the lender got recognized by the RBI as an NBFC. Now the apex bank has issued guidelines in respect of their functioning .and has capped the maturity term for the loan at three years. For a lender operating as a P2P entity, the total exposure allowed in respect of all borrowers at a given point in time is capped at Rs. 10 lakhs. Also, the borrower can take a maximum loan of Rs. 10 lakh across all of the P2Ps. But for the same borrower, the P2P lender is allowed to take a maximum exposure of not more than Rs. 50000.
Further, the company willing to register as an NBFC-P2P with the RBI is required to maintain a net fund of Rs. 2 crore or more, in case the apex bank specifies. The entities functioning as P2P also need a certificate of registration for conducting business which they can apply within the three months timeframe.
The new norms say the NBFC shall serve as an intermediary and cannot lend or raise deposits on its own. RBI Deputy Governor N S Vishwanathan said that P2P entity would "target the missing middle in the credit ladder" and "bring a major shift in the crowdfunding activity".
Also, the P2P lender is not allowed to carry on flow of funds in international markets and is required to store as well as process all information pertaining to the participants and activities involved on the hardware located well within India.
The fund transfer between participants on the platform shall be via the escrow account. No cash transactions are allowed and all fund transfers have to be routed through a bank account.