RBI’s New Rules for P2P Platforms: A Net Positive for Lenders and Borrowers, Say Experts

- The Reserve Bank of India (RBI) has issued amended guidelines for Peer-to-Peer (P2P) lending platforms, aiming to enhance transparency and curb irregular practices. - The new rules prohibit NBFC-P2P entities from assuming credit risk, ensuring lenders are fully aware of the risks involved and responsible for any losses due to borrower defaults. - Stricter guidelines for escrow accounts mandate that funds be transferred within one day of receipt, ensuring timely processing of transactions. - Restrictions on cross-selling products, except for loan-specific insurance, aim to reduce conflicts of interest and focus platforms on their core function of matching lenders with borrowers. - Monthly disclosures of portfolio performance and non-performing assets (NPA) will help lenders make more informed decisions, with a call for standardized formats to facilitate easier comparisons across platforms. Source: [Moneycontrol](https://www.moneycontrol.com/news/business/personal-finance/rbis-new-rules-for-p2p-platforms-a-net-positive-for-lenders-borrowers-say-experts-12801755.html)