Peer-to-Peer (P2P) lending

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After digital payments and digital lending, the Reserve Bank of India is looking closely at platforms that facilitate direct, or peer-to-peer (P2P), lending between individuals.

About Peer-to-Peer (P2P) lending:

  • It is done through a website that connects borrowers and lenders directly.
  • Those who want to lend money, open an account with a P2P platform as a lender. And those who require a loan register themselves as a borrower.
  • It enables individuals to obtain loans directly from other individuals, cutting out the financial institution as the middleman.
  • In 2017, the Reserve Bank of India brought this service under its regulatory purview.
  • Only an NBFC can register as a P2P lender with the permission of RBI. Every P2P lender should obtain a certificate of registration from the RBI.
  • The minimum capital requirement to set up a P2P platform is fixed at Rs. 2 Crores.


Q1) What is a Non-Banking Financial Company?

Non-Banking Financial Company is a financial institution that offers financial services and products similar to traditional banks, but it does not hold a banking license and cannot accept deposits from the public like a commercial bank.

Source: After online payments, digital loans, now P2P lending under the RBI lens