The Reserve Bank of India (RBI) on Friday tightened some rules related to loans (RBI Loan Rule). The bank has tightened the rules for ‘Non-Banking Financial Company – Peer to Peer Loan Platform’ (NBFC – P2P Loan Platform) to improve transparency and compliance.
The Reserve Bank of India (RBI) on Friday tightened some rules related to loans (RBI Loan Rule). The bank has tightened the rules for ‘Non-Banking Financial Company – Peer to Peer Loan Platform’ (NBFC – P2P Loan Platform) to improve transparency and compliance. P2P loan platforms connect loan takers directly to lenders without intermediary of banks or financial institutions.
According to the revised master direction of RBI, P2P platforms should not promote lending as an investment product. These should not have features like assured minimum return, cash option.
It also said that NBFC-P2P lending platforms should not entice customers for sale of any insurance product that includes features such as credit enhancement or credit guarantee. The central bank also said that no loan should be issued unless the lender and borrower are matched as per the board-approved policy.
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