Notify me of follow-up comments by email. In so far as 20 Companies have been registered with RBI providing services of peer to peer lending platform. – setting out and maintenance of Fit and Proper Criteria of its directors. (i) comply with any Direction issued by the Bank; or (ii) maintain accounts, publish and disclose its financial position in accordance with the requirements of any law or any Direction or order issued by the Bank; or (iii) submit or offer for inspection its books of account or other relevant documents when so demanded by the Bank. NBFC-P2P provides services of matching the right lender with the right borrower through the due diligence on electronic platform (e-platform). #6. In india one needs to fulfil certain conditions in order apply for the peer to peer lending license-, 2]The applicant shall have adequate amount of capital structure. Peer to peer lending operates on a ‘many to many’ lending model through internet intermediaries, also called a lending platform, who arrange and manage the loans. Individuals and small businesses are looking for alternate financial market and services. It should facilitate availability of information and documents between lenders and borrowers and also to protect their rights and information. – Any takeover or acquisition of the of Control of NBFC-P2P, which may or may not result in change in management. Operational Policy and Framework: – Any allotment of Shares which will take the total holding of Individual or group to 26% or more of the paid up capital of NBFC-P2P. It provides other ancillary services like services of loan recovery services, credit assessment services, profile verification and other related services. How MUDS Management Helps in Registration of New Asset Financing Firms? (iv) validity of the in-principle approval :- The validity of the in-principle approval issued by the Bank will be twelve months from the date of granting such in-principle approval. the required technological, managerial and entrepreneurial capabilities of applicant to do the business of P2P Lending Platform. Why not give them a call right now at +91 9911222771 and start a conversation immediately. In addition to compliances and reporting requirement under the Companies Act and other applicable regulation, an NBFC-P2P is required to report to concerned regional office of the Reserve Bank of India as per RBI directions. b. NBFC –Peer to Peer Lending platform (NBFC-P2P) is a type of Non-Banking Financial Company which carries on the business of providing services of Loan facilitation to willing lenders and borrowers through online platform. Currently the business of P2P lending is emerged by Fintech companies in India. – Conducting due diligence of participants. Permissible Business Activities of P2P Lending platforms in India In India ,the Peer to Peer[P2P] lending business has been extended to 5 billion dollar as per the reports being concerned.Therefore the entrepreneurs and startups business can easily avail loans from this platform without much documentation. A-60, 2nd Floor, Sanjay Gram, (ii) Such companies, which have applied to the Bank for registration as an NBFC – P2P, shall be permitted to continue the business of a Peer to Peer Lending Platform till their application for issuance of CoR is rejected, subject to such conditions, including winding down of business, as the Reserve Bank may impose. BIS & Company Registration India | Financial & Legal Consultant. Required fields are marked *. – It should not do the business of lending on its own. – The maturity period of Loan linked to platform shall not exceed 36 months. d. Disbursal of Loan through the Platforms: All loans should be processed only when the Individual lender has approved the individual borrower and the concerned participant has signed the Loan agreement. 3] In peer to peer lending ,the lenders communicates with the borrower directly to finalize the deal, 1]The risk factors involved here are higher and uncertain as compared to the banking financial institutions, 2] The returns are lower in comparison to public traded index fund, 3] The future possibilities are uncertain and unrealistic and it’s too early to make future opinions of this type of industry, Your email address will not be published. Delhi-110092 , India. – business continuity plan in case of Closure of platforms. a). The borrower should keep in mind that at any given point in time, his borrowed amount should not exceed rupees 10,00,000 lakhs across all available Peer-to-Peer lending platforms. Registration and Compliance of Peer to Peer Lending Platform-NBFC. Such companies, which have applied to the Bank for registration as an NBFC – P2P, shall be permitted to continue the business of a Peer to Peer Lending Platform till their application for issuance of CoR is rejected, subject to such conditions, including winding down of business, as the Reserve Bank may impose. These are as follows: a. 1] There is high use of information technology and there is a lack of security as documents can be leaked or information can be wrongly utilized. In such lending there is no involvement of any financial institutions and banks and the lenders are free to choose the borrowers whichever they want to give loans. B. Following are the norms that should be strictly adhered to by NBFC-P2P as per directives issued by RBI, – Maintenance of Leverage Ratio (Outside Liabilities/ Net owned fund) not exceeding 2. – Providing assistance in disbursement and repayment of loan Amount. #2. – Any change in Auditor and office address of the auditor of the Company. – Obtaining Consent of Participants to access their credit information. NBFC –Peer to Peer Lending platform (NBFC-P2P) is a type of Non-Banking Financial Company which carries on the business of providing services of Loan facilitation to willing lenders and borrowers through online platform. 6] After doing detailed and vigilant verification of the application and documents attached with it , the RBI provides the license certificate to the applicant company . Shweta Gupta from MUDS is recognized amongst the most-respected, knowledgeable and yes, pocket-friendly as well. -an NBFC-P2P should confirm to the Information Technology framework as stipulated by RBI direction on Information Technology for NBFC sector. 3] The applicant company shall have technological , managerial , 4] A pure motive to serve the public and its interest, 6] The board of directors shall fulfill all terms and conditions of RBI, Any company being registered as private or public limited company can apply for the license with the reserve bank of India.They need to fulfill the conditions below –. This platform helps in diversifying the lender’s risk, allowing them to reinvest their earnings across new loans ultimately spreading your investment and managing the overall risk. 10 lacs at any point of time across all platforms. – Change in Registered/ corporate office, address and contact details of NBFC-P2P. This is an effective way to get loans and financial help from others directly without involving any middlemen or financial intermediaries. Financial services with the help of technology is going to play a major role in Indian economy due to its prominent requirement, low overhead cost and disintermediation. It was rightly said by Ralph Waldo Emerson– “Every Wall is a Door” Thus, take a step forward to open the door for the new FDI norms. (vi) Grant a CoR as an NBFC–P2P :- The Bank may, after being satisfied that the entity is ready to commence operations, grant a CoR as an NBFC–P2P, subject to conditions as deemed fit by the Bank. Opposite Sector-14, The Peer to peer lending companies are being regulated through Reserve Bank of India [RBI]and therefore reserve bank of India reserves power for providing lending license to the applicant. Your email address will not be published. Peer-to-peer lending is an online platform that links lenders to borrowers. This form of lending money is getting very famous among investors as they get a higher rate of return through the Peer to Peer[ P2P] lending business. 1] The applicant company must be registered as a private or public company under the eyes of law and have an objective of doing financial financing of money. Within one month from the date of changes Information System Audit report of duly CISA certified external Auditor within one month of Audit report need to submitted to concerned regional office of RBI. The P2P lending business model is regulated by the Reserve Bank of India and recognized as Non- Banking Financial Company. The RBI has laid down multiple directives that have to be kept in mind while lending as well as borrowing money. – International Flow of fund is prohibited. Quarterly statements: Saturday & Sunday: 11:00AM–3:00PM, BIAT Consultant is online portal for BIS Registration , Company Registration , Business Finance , Legal Advisory Services And more …. IS Audit Report: (vii)Application:- Companies that are undertaking the business of Peer to Peer Lending Platform, as on the date of effect of these directionsdated 4th Oct, 2017, shall apply for registration as an NBFC-P2P to the Bank within 3 months from that date. 2 Crore. After verification and satisfaction of necessary conditions and plan of business the RBI gives in-principle approval with validity of 12 months for setting up of Peer to Peer Lending Platform and to put in place all required technologies to start with the Business of NBFC-P2P. – It cannot arrange or provide Credit enhancement or guarantee services. PaisaDukan received Certificate of Registration on 28th June, 2018 by the Reserve Bank of India under Section 45 IA of the Reserve Bank of India Act, 1934. Peer to peer lending business, also known as crowdfunding or Marketplace lending, regulated or unregulated, has its presence in number of developed countries all over the world, with its growing market size. – It Should have a Minimum Net worth of Rs. – Scalable Information Technology Infrastructure should be in place to handle the growth in business. For a given borrower, a lender is only allowed to invest rupees 50,000 across all available Peer-to-Peer lending platforms. Opportunity for NBFC –P2P in India In India the business of Peer to Peer lending has evolved with the advent of technology. – addressing grievances/complaints and disposal thereof. – an NBFC-P2P should have a Board approved policy for security and maintenance of Information technology system for protecting it from unauthorized access. within 15 days from the end of the quarter: – Number and Amount of Loan disbursed and Closed during the quarter, – Number and Loan Outstanding at the end of the quarter. 2] The documentation is very simple and easy as compared to documents required while taking loan from financial institutions, 3] The fees and other charges required are low as compared to banking institutions. 10 lacs across all platforms shall produce to P2P Platform a certificate of Net worth from Chartered Accountant certifying minimum Net worth. 50,000 across all platforms. – Number of Complaints received, disposed of, and outstanding at the beginning and end of the quarter separately from lenders and borrowers. Any other condition as may be specified by the Bank, fulfillment of which, in the opinion of the Bank, is necessary to ensure that the commencement of or carrying on the business in India shall not be prejudicial to the public interest. – It shall not allow secured lending on its platform. Disclosure Requirements The loans here are available without the borrower having to provide any mortgages. Save my name, email, and website in this browser for the next time I comment. Can A Foreign National Start A Business In India Without Being A Resident? No NBFC-P2P shall commence or carry on the business of a Peer to Peer Lending Platform without obtaining a Certificate of Registration (hereinafter referred to as “CoR”) from the Bank. – Any Change in Management of NBFC-P2P which would result in change in more than 30 per cent of the Directors. Subhash Chowk , Laxmi Nagar But this concept is comparatively new as its inception ranges back in the year 2005. At a given point of time, a lender cannot invest more than 10,00,000 lakh rupees. – Any Change in Shareholding that would result in right to appoint a director. 1] The return of the investor is higher as compared to the risk taken.