RBI to regulate peer-to-peer lending firms as NBFCs: Government

 

According to a government of India gazette notification, all peer-to-peer lending (P2P) platforms will be regulated by the Reserve Bank of India (RBI). All the P2P loan platforms will be treated as non-banking financial companies (NBFCs) and will be brought under the ambit of the banking regulator. The notification will help P2P lenders gain official recognition, opening new avenues for fund-raising and business expansion.

The RBI had floated a consultation paper in April 2016 on developing regulatory norms for P2P lending.

P2P lending is a form of crowd-funding used to raise loans which are paid back with interest. It can be defined as the use of an online platform that matches lenders with borrowers in order to provide unsecured loans.