In India, a Peer-to-Peer (P2P) lending company is

Solution

A Peer-to-Peer (P2P) lending company in India must be registered as an NBFC-P2P with the Reserve Bank of India (RBI). RBI introduced regulatory guidelines to ensure transparency and reduce risks in this sector. Key provisions under RBI’s framework for NBFC-P2P include: • Minimum Net Owned Funds (NOF) of ₹2 crore. • Maximum leverage ratio of 2. • Maximum exposure of a lender to all borrowers across P2P platforms: ₹50 lakh. • Maximum loan amount a borrower can take from all lenders across P2P: ₹10 lakh. • Maximum maturity period of P2P loans: 36 months. • Maximum exposure of a lender to a single borrower: ₹50,000. These norms help in protecting both lenders and borrowers while promoting trust in the P2P lending ecosystem.