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P2P investments are never about liquidity. They are about providing relatively safer investments than MF or stocks with higher ROI than FDs. This guideline does makes sense. Although with the absence of the encouraging factor of liquidity, the adoption might dip a little.
P2P investments are presented high return instruments / relatively safer than FD - it's an eyewash from the companies side. That's why RBI is putting a leash onto it.
Think of it as from the angle of secured vs unsecured debt - to get a loan against property, your house is on line. Even if you default, they can sell your house. Thus, systemic impact is low.
But unsecured loans have no such burden. If you default, no worries. Loans can be distributed to virtually anyone - just rate would be high for likely defaulters. Thus, if a large bet goes wrong, money cannot be recovered and the effect is carried forward on the system. Eg. FinMin had to relax loan default criteria during CoVid, otherwise there was a risk on the banking stability. Same thing here.
It's always better to understand the business model behind these products
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