In an order released following the presentation of the fifth bi-monthly monetary policy review statement, the Reserve Bank of India provides relief to the Peer-to-Peer (P2P) platforms in the country. The central bank raised the cap for an individual lender to Rs 50 lakh from Rs 10 lakh.
"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," said RBI in its Statement on Developmental and Regulatory Policies issued on Thursday.
The cap on exposure of a single borrower across all NBFC P2P platforms remains Rs 50,000.
"It is proposed to do away with the current requirement of escrow accounts to be operated by bank-promoted trustees for transfer of funds having to be necessarily opened with the concerned bank. This will help provide more flexibility in operations," it further said.
The changes will help flourish the business of P2P lending in India, which received issued directions from RBI just a little over two years ago. Players in the segment had been asking for a revision in the cap as it kept HNI (High Networth Individuals) away from the platforms, hindering growth.