The Reserve Bank of India (RBI) is planning to come up with a concept note on peer-to peer (P2P) or social lending and will take decisions on how to regulate the fast-growing lending marketplace. The said announcement was made by central bank’s Deputy Governor R Gandhi at a non-banking financial companies’ (NBFCs) summit by Assocham on Monday.
It may be noted that P2P lending is an online form of lending by unrelated individuals for a variety of businesses. The space, which is tipped as fastest-growing new form of lending, is unregulated.
Gandhi said that the central bank would hold discussions with the Securities and Exchange Board of India (SEBI) on regulating the space and the discussion paper would be assessed to decide whether to regulate the sector or not.
“It needs to be assessed whether we should be regulating it or not. After having detailed discussions with all stakeholders, a final call would be taken by us,” he said, adding while SEBI had come up with a discussion paper exploring the securities side of the business, the RBI was yet to come up with its discussion paper from the lending and borrowing side.
He further said that idea of exempting NBFCs from regulations is not feasible from the customer service point of view. The deputy governor said three foreign banks have applied to set up wholly owned subsidiaries in India. He, however, named only two — State Bank of Mauritius and DBS of Singapore.