The Reserve Bank of India (RBI), on 13 September, had written a letter to the association of NBFCs (non-banking financial companies), seeking details of instances where the P2P lending platforms (such as Faircent, LenDenClub, Lendbox, etc) had to reject loan to potential customers due to regulatory restrictions, cited ET.
The move by the apex bank comes after a month when the association had sent a letter to the Bank, regarding the NBFC guidelines in 2018, as per which, the credit limit of such lenders could offer customers to INR 10 Lakh.
Whereas, the letter by the RBI read, “The association is requested to furnish quantitative data, if any, with respect to P2P platforms on instances of partial funding of borrowers, creditworthy borrowers registered but not granted loans.”
Rajiv M Ranjan, secretary of the Association of NBFC Peer-to-Peer Lending Platforms, said that the regulators [RBI] quizzing comes as a positive response to the issues they had raised last month.
Ranjan also added that in the current situation, it is important to bring the ground reality out in the open to give a breather to the industry.
On the other hand, the letter, sent by the association said, “In the last 18 months since the guidelines were announced, the biggest challenge being faced by the nascent industry is the lender limit of Rs 10 lakh. This single issue…is threatening the very existence of the industry.”
The letter also stated that P2P lending companies are losing INR 1K on an average per loan for borrowers who avail at least INR 3 Lakh through the platform, given that the cost of acquiring retail lenders is around INR 4K.
Moreover, the body had sought an immediate extension of the limit to INR 1 Cr for retail investors and allowing high net-worth individuals (HNI) to lend money through their platforms.