The notification issued by Reserve Bank of India on Monday said that the aggregate exposure all peer-to-peer lending (P2P) platform shall not exceed Rs. 50 lakhs at any given point of time. The decision has been taken in view to protect the consumers’ interest.
The notification issued by the central bank says, ‘On a review, it has been decided that the aggregate exposure of a lender to all borrowers at any point of time, across all P2P platforms, shall be subject to a cap of Rs 50,00,000 provided that such investments of the lenders on P2P platforms are consistent with their net-worth’.
The lenders will also have to submit a declaration form, making a statement of understanding all associated risks with lending transactions and the platform does not assure a return of principal/payment of interest, to the P2P platforms.
In addition to this declaration form, the lenders with over 10 lakhs investment through platforms will be required to produce a certificate from working Chartered Accountant in favour of minimum net-worth of Rs. 50 lakhs to P2P platforms.
The P2P lending guidelines prescribe an escrow account for fund transfer under P2P lending, operated by a bank promoted trustee. The P2P lending needs to maintain two escrow accounts – one for fund received and pending disbursal and the other for collections – under the transaction.
The Reserve Bank of India in the notification has said that the escrow accounts which are operated by bank promoted trustee for fund transaction don’t need necessarily to be maintained with the same promoter bank.