The updated guidelines for Non-Banking Financial Company – Peer to Peer (NBFC-P2P) Lending Platform provide clarifications on various aspects. The term ‘person’ in the NBFC-P2P Directions includes individuals, bodies of individuals, HUF, firms, societies, and artificial bodies, whether incorporated or not. Electronic platforms acting as Direct Service Agents (DSAs) or Business Correspondents for banks or NBFCs are excluded from P2P regulations unless they serve other retail lenders, in which case separate registration as an NBFC-P2P is required. Leverage is defined as the ratio of outside liabilities to the platform’s owned funds, excluding customer funds lent or borrowed. Investible funds refer to capital invested in the business and surplus generated, excluding funds flowing through escrow accounts. For NBFC-P2P registration, applicants must provide a list of promoters and the source of Rs. 2 crore upfront capital, which must be infused before the Certificate of Registration (CoR) is issued. Existing NBFCs cannot operate as NBFC-P2P platforms. Finally, the ‘T+1’ day for fund transfers refers to a bank working day.
RESERVE BANK OF INDIA
Non-Banking Financial Company – Peer to Peer Lending Platform
(Updated as on December 12, 2024)
Sr. No.1 What is the meaning of the word ‘person’ mentioned at para 4(1)(iv) of the NBFC-P2P Directions, 2017? Would it also include banks/NBFCs?
Ans: For the purposes of para 4(iv) of the Directions, the term ’person’ shall include an individual, a body of individuals, a HUF, a firm, a society or any artificial body, whether incorporated or not.
Sr. No. 2 Would electronic platforms serving as Direct Service Agents (DSA)/ Business Correspondents for banks and/ or NBFCs fall under the purview of the NBFC-P2P Directions?
Ans: Electronic Platforms that assist only banks, NBFCs and other regulated AIFIs to identify borrowers are not to be treated as P2P platforms. However, in cases where, apart from banks or NBFCs or AIFIs, other retail lenders use the platform for lending, the platform will have to register separately as an NBFC-P2P.
Sr. No. 3 How is leverage defined in case of NBFC-P2P lending platform?
Ans: Leverage ratio refers to outside liabilities on the balance sheet of an NBFC-P2P Platform that it can raise divided by its owned funds. Customers’ funds lent/borrowed by using the platform is not reckoned as outside liability of the platform.
Sr. No. 4 What is the meaning of Investible Funds?
Ans: Investible funds refer to capital infused in the business and surplus generated out of business of NBFC-P2P. It does not include funds of lenders and borrowers that flow through the escrow accounts. Customers’ funds lent/borrowed by using the platform cannot be utilised by the platform.
Sr. No. 5: Do applicants of NBFC-P2P registration require to bring in NOF of Rs. 2 crore upfront at the time of making the application?
Ans: The applicant should give the list of promoters and the source of funds for the minimum capital of Rs 2 crore. The capital should be infused before issue of CoR. No change in promoters will be allowed in the interregnum.
Sr. No. 6: Will an existing NBFC be able to operate as an NBFC-P2P?
Ans: No.
Sr.No.7: Regarding the ‘T+1’ day mandated as per para 9(ii) of the Directions, does the ‘day’ refer to a bank working day?
Ans: Yes, since all fund transfers must be conducted through and from bank accounts, ‘T+1’ day shall be considered as ‘T+1’ bank working day.
