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ARTICLE · 20 AUGUST 2024

AKP Banking & Finance Digest- August 19, 2024

AK & Partners
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The Reserve Bank of India ("RBI") has imposed stricter regulations on peer-to-peer lending platforms following instances of regulatory violations.

IndiaFinance and Banking
Anuroop Omkar
Anuroop Omkar

1. Regulatory Updates

1.1. India

1.1.1. RBI modifies NBFC-P2P directions amid compliance concerns

The Reserve Bank of India ("RBI") has imposed stricter regulations on peer-to-peer lending platforms following instances of regulatory violations. RBI's new directive prohibits Non-Banking Financial Company ("NBFC") – Peer to Peer Lending ("P2P") platforms from assuming credit risk, offering credit enhancements, or providing guarantees. Platforms are required to ensure that all credit risks are borne solely by the lenders. Furthermore, they must disclose portfolio performance, including non-performing assets (NPAs), and any losses incurred by lenders on their websites. Cross-selling of products is restricted to loan-specific insurance only. The RBI has also introduced a cap of INR 50 lakh (Indian Rupees Fifty Lakhs only) on a lender's aggregate exposure across all P2P platforms, with investments above INR 10 lakh (Indian Rupees Ten Lakhs only) necessitating

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