RBI tightens norms for P2P lending platforms

The Reserve Bank on Friday tightened norms for Non-Banking Financial Company - Peer to Peer Lending Platforms (NBFC-P2P Lending Platform) to improve transparency and compliance. As per the revised master direction issued by the RBI, a P2P platform should not promote peer-to-peer lending as an investment product with features like tenure-linked assured minimum returns, liquidity options, etc.

Non-Banking Financial Company - Peer to Peer Lending Platform (NBFC-P2P Lending Platform) should not cross-sell any insurance product also, which is in the nature of credit enhancement or credit guarantee, it said.

No loan should be disbursed unless the lenders and the borrowers have been matched/mapped as per the board-approved policy framed, it added.


The RBI issued guidelines for P2P lending in 2017. Such a platform acts as an intermediary providing an online marketplace/platform to the participants involved in peer-to-peer lending.

However, it has been observed that some of these platforms have adopted certain practices, which were violative of the provisions of Master Direction 2017.

"Such practices include, among others, violation of the prescribed funds transfer mechanism, promoting peer-to-peer lending as an investment product with features like tenure linked assured minimum returns, providing liquidity options and at times acting like deposit takers and lenders instead of being a platform," it said.

In view of violations by some entities, the RBI issued amended guidelines. The revised guidelines come into effect immediately.