'Out of turn' request: RBI seeks loan disbursement data from P2P companies

Norms tightened after flagging regulatory violations by some lending platforms

After flagging risks and tightening guidelines for peer-to-peer (P2P) lending platforms in August, the Reserve Bank of India (RBI) has requested specific loan disbursement data from these firms for the periods of April to June 2024, July 1 to August 16, and August 16 to September 30.

The RBI released revised guidelines for P2P lending platforms on August 16. Most platforms have provided this data to the regulator.

This development is considered ‘out of turn,’ as companies are typically required to submit quarterly data, including information on assets under management (AUM), outstanding loans, gross non-performing assets, and loan disbursals, sources said.

Additionally, the central bank has sought data on loans outstanding categorised by tenor as on September 30, as well as by interest rates charged for loans disbursed during the same period, according to sources familiar with the matter.

In its revised guidelines, the RBI mandated that funds transferred into the lenders’ and borrowers’ escrow accounts should not remain in these accounts for more than T+1 day, where ‘T’ is the date on which the funds are received.

The RBI also flagged regulatory violations by some P2P lending platforms, highlighting that some were promoting P2P lending as investment products, offering liquidity options, and operating as deposit-takers and lenders, rather than intermediaries.

According to industry sources, the regulator’s request for comparative data between July 1 to August 16 and August 17 to September 30 aims to monitor how the sector has adjusted after the revised guidelines were issued.

“The survey carries a couple of new questions that differ from the regular quarterly data we provide. Since they have specifically asked for data after August 16, they may be trying to assess how the industry and the businesses have performed,” an industry player said, requesting anonymity.

The RBI has directed companies to submit data on the quantum of AUM or outstanding portfolio across different loan tenors, the person said.

Since the revised guidelines were introduced, the P2P lending segment has reportedly seen a nearly 90 per cent drop in volumes, according to industry sources.

“We feel this would have been asked for since some platforms may exit the P2P business. The data point could be used to check how long does it take for collections or outstanding recoveries to happen,” another industry player said.

“It is difficult to implement the T+1 timeline by November 15 as the technical execution is challenging. No bank in the country can reconcile transactions as fast as the RBI expects us to do,” one of the people quoted above said.

The person added that the new framework would increase operating costs.

Currently, there are 26 licensed players in the P2P lending space, but only 10-11 are actively operating, with the industry’s AUM totaling Rs 11,000 crore.

In August, the P2P lending industry association requested that the RBI reconsider its T+1 mandate for clearing funds in escrow accounts. Without regulatory relief, industry players fear they will have to absorb the additional costs associated with the T+1 requirement, and platforms with limited capital may struggle to survive under these conditions, potentially threatening the already fragile industry.

RBI AT WORK 

> Loan disbursement data asked for April-June, July 1-August 16, and August 16-September 30 of 2024

> The RBI has also sought data on outstanding loans, categorised by tenor as of Sep 30 along with interest rates charged

> Experts believe the move is for monitoring how the sector has contracted after revised guidelines were issued

> The volumes in the P2P lending segment likely have dropped by almost 90% since the RBI's revised guidelines of RBI