Is Peer To Peer Lending Legal In India

Is Peer To Peer Lending Legal In India
February 14
23:56 2018

P2P lending in India is legal but as of now unregulated. However, the RBI has been closely assessing the need for regulation in this industry and has also come up with a consultation paper and suggested draft rules.

Concern of the RBI are from the perspective of consumer (both lender and borrower) protection. A well-functioning financing environment is a must for the economy, and therefore it requires a strong financial participants. Since p2p lending is an alternative to institutional lenders, its efficiency is a concern. Up until now the volume of p2p transactions is very low and hence not so much of an immediate concern for the RBI. Therefore, the RBI has so far restrained itself from regulating the business and has adopted a wait and watch approach.

As per recent newspaper reports the draft rules which were released in April, 2016, have been accepted by the Ministry of Finance, GoI and were in fact expected to be finalised by July, 2017.

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