“At present, the aggregate limits for both borrowers and lenders across all P2P platforms stand at₹10 lakh,” said Shaktikanta Das, governor, RBI. “In order to give the next push to the lending platforms, 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 ₹50 lakh.”
In the P2P industry, individual borrowers are connected to lenders through digital platforms, and the platform just plays the role of a marketplace. More than 15 companies have registered with the RBI as non-banking finance company P2P lending platforms.
The nascent industry has been demanding an increase in the limits for a long time.
ET reported on August 20 that the industry association for P2P players had written to the RBI requesting for an increase in the limits, as it was hindering their growth potential.
Further, ET also wrote on October 4 that the P2P industry association had reached out to the finance ministry with the same set of requests.
“The increase in limit showcases the high growth potential of the industry and confidence of regulator on this emerging asset class. We see this as a positive movement and a big boost to the nascent industry, which is going to provide an alternative banking solution for investors and borrowers,” said Rajiv M Ranjan, secretary, Association of NBFC P2P Platforms, the industry body.
The central bank had opened doors to multiple industry representations over the last few months and had even been monitoring the financial performance of every P2P platform closely.
Industry insiders said these were precursors to Thursday's move. “We requested for a limit of ₹1 crore for investment but… at least RBI considered for an elevation to ₹50 lakh,” Ranjan told ET after the announcement.
Industry players are also saying they expect venture capital and private equity funding to pick up following the latest announcement. Industry sources said the lower limit earlier was one of the major reasons why investors had been cautious about the P2P space.
Run a business? Take part in India's definitive ranking for Micro, Small & Medium Enterprises
1 Comment on this Story
Abhijit 453 days ago
All mix and match process is going on