Reserve Bank of India (RBI) has tightened rules for peer to peer (PTP) lending platforms. An NBFC-P2P shall not provide or arrange any credit enhancement or credit guarantee. NBFCP2P shall not assume any credit risk, either directly or indirectly, arising out of transactions carried out on its platform. An NBFC-P2P shall not cross sell any product except for loan specific insurance products. It may be noted that NBFC-P2P shall not cross sell any insurance product also which is in the nature of credit enhancement or credit guarantee. RBI further noted that 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 Rs.50,00,000 provided that the amount lent by the lenders on P2P platforms is consistent with their net-worth. In case, the amount lent by a lender is more than Rs.10,00,000 across P2P platforms, the lender shall produce a certificate to P2P platforms from a practicing Chartered Accountant certifying minimum net-worth of Rs.50,00,000. NBFC-P2P shall be required to obtain explicit declaration from the lender stating that he/she has understood all the risks associated with the lending transactions and that P2P platform does not assure return of principal/payment of interest.
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