RBI may change Rs 10 lakh lending cap on P2P platforms, say P2P players
Peer to Peer or P2P players are hopeful that the comprehensive financial data sought by the RBI might help the regulator to take some major policy decisions
“The data (sought) is very comprehensive in nature. Some P2P companies are incurring losses due to lower volumes and higher operational costs. This (review) may help RBI in making a decision on the Rs 10 lakh-cap which is a bottleneck,” says Surendra Kumar Jalan, MD and CEO, OMLP2P.
An individual can currently lend a maximum of Rs 10 lakh in a P2P platform. The industry participants believe the Rs 10 lakh cap is hurting the growth prospects of the industry.
Jalan says RBI had asked for details on monthly spends, breakup of expenses for the first time since inception of NBFC-P2P.
All NBFCs are required to submit their performance report to RBI. But according to some P2P players, the data submitted is more than just a report card.
“For the first time, PAN cards of lenders have been sought. Now, RBI can check whether a lender has lent more than Rs 10 lakh across platforms. This move will ensure compliance and bring more transparency to the P2P industry,” says Raghavendra Pratap Singh, Co-Founder, i2ifunding. “The data collected will help RBI take the required action. It may think of revising the Rs 10 lakh cap on lenders,” adds Singh.
Some players believe that the regulator might ask P2P companies to follow a standard procedure while displaying data on their platforms. “RBI may come out with regulations on displaying information in a standardised format,” says a prominent P2P player on condition of anonymity.
The regulator had earlier said it would closely observe the P2P industry for a year or so, before deciding on any change its stance. P2P players believe that the RBI wants to keep a check whether P2P companies are making money and the business is sustainable.
Last month, RBI had asked all registered P2P companies to submit a comprehensive report on lender profiles, their exposure per borrower, details on delinquencies, loan portfolio to access the platforms’ financial health and the viability of P2P business model.
P2P players believe that the regulator is likely to take strict action if there are any discrepancies in the data submitted by the companies.
“RBI may cancel the NBFC-P2P’s registration if the information is found to be wrong or data is misguided,” says another P2P player who didn’t wish to be named.