DAHISAR CPE STUDY CIRCLE
OF WIRC OF ICAI
P2P LENDING
(A New Perspective)(A New Perspective)
By
CA Nimesh Dedhia
PND WEALTH MANAGEMENT IMF LLP
Mobile: 982049948, Email: pndwealth@gmail.com

Topics
1. Type of Lending
2. What is P2P Lending?
3. Growth of P2P Lending across the world
& India& India
4. RBI Regulations related to P2P Lending
5. Technology Used
6. Opportunities for Professionals
7. Overview of P2P platform
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MANAGEMENT IMF LLP, 9820944648
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Type of Lending?
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Type of Lending
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New Way of Lending?
•Crowd Funding
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Which Film was produced through
Crowd Funding?Crowd Funding?
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Year – 1976 by Shyam Benegal
This film was
funded by 5 lakh
Gujarati farmersGujarati farmers
pooling together
Rs. 2 each to make
this Rs. 10 lakh
film.
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Year 2003 - Produced by Rajat Kapoor
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New Way of Lending?
•P2P Lending
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What is P2P Lending?
• Peer to Peer (P2P) lending enables individuals
or businesses to obtain loans directly from
other individuals through an online platform
• Simply we can say it is Person to Person• Simply we can say it is Person to Person
lending.
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How P2P lending works?
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History of P2P
Lending?Lending?
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History of P2P Lending
• First P2P lending company was founded in UK
in February 2005
• According to the Reports, £3.55B (33,021
Crores Indian Rupee) was attributed to Peer toCrores Indian Rupee) was attributed to Peer to
Peer alternative finance models in UK
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MANAGEMENT IMF LLP, 9820944648
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History of P2P in India
• 30 companies were in business of P2P in India
since last 6-7 years.
• Currently it is been regulated by RBI since 4th
October 2017.
• As on August 31, 2019, 19 companies including• As on August 31, 2019, 19 companies including
Faircent, Lendbox, LenDenClub and i2i funding
have been granted licenses by the Reserve Bank
of India
• In India, approx 500 Crores amount of loan
disbursed through this system.
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MANAGEMENT IMF LLP, 9820944648
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RBI Regulations
related to P2P?related to P2P?
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RBI Regulations related to P2P
• NBFC-P2P License requirements:
– The company should be incorporated in India with
ROC with P-2-P Objects
– The company should have the necessary
technological, entrepreneurial and managerialtechnological, entrepreneurial and managerial
resources to offer such services to the participants
– The company should have the adequate capital
structure to undertake the business of Peer to Peer
Lending Platform
– The promoters and the Directors of the company
should be fit and proper
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RBI Regulations related to P2P
• NBFC-P2P License requirements:
– The general character of the management of the
company should not be prejudicial to the public
interest
– The company has to submit a plan for, or
implemented, a robust and secure Information
– The company has to submit a plan for, or
implemented, a robust and secure Information
Technology system
– The company should submit a viable business plan for
conducting the business of Peer to Peer Lending
Platform
– Public interest shall be served by the grant of CoR
– Any other condition as may be specified by the RBI
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RBI Regulations related to P2P
• Scope of P2P Companies
– can not raise Deposit or Lend Money on its own
– undertake credit assessment and risk profiling of the
borrowers and disclose the same to their prospective
lenders;lenders;
– undertake documentation of loan agreements and
other related documents;
– provide assistance in disbursement and repayments of
loan amount;
– render services for recovery of loans originated on
the platform.
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RBI Regulations related to P2P
• Prudential Norms :-
– NBFC-P2P shall maintain a Leverage Ratio not
exceeding 2
– One can lend maximum up to Rs.10 lakhs and borrow
up to Rs.10 Lakhs across all P2P.
– The exposure of a single lender to the same borrower,– The exposure of a single lender to the same borrower,
across all P2Ps, shall not exceed Rs.50,000/-
– The maturity of the loans shall not exceed 36 months.
– P2Ps shall obtain a certificate from the borrower or
lender, as applicable, that the limits prescribed above
are being adhered to.
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RBI Regulations related to P2P
• Fund transfer mechanism :-
– Fund transfer between the participants on the
Peer to Peer Lending Platform shall be through
escrow account mechanisms which will beescrow account mechanisms which will be
operated by a trustee.
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RBI Regulations related to P2P
• Submission of Data to Credit Information
Companies:-
– An NBFC-P2P shall become member of all CICs and
submit data (including historical data) to them.
– NBFC-P2P shall:
• (i) keep the credit information (relating to borrower
transactions on the platform) maintained by it, updated
• (i) keep the credit information (relating to borrower
transactions on the platform) maintained by it, updated
regularly on a monthly basis or at such shorter intervals as
may be mutually agreed upon between the NBFC-P2P and
the CICs;
• (ii) take all such steps which may be necessary to ensure that
the credit information furnished by it is up to date, accurate
and complete;
• (iii) include necessary consents in the agreement with the
participants for providing the required credit information;
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RBI Regulations related to P2P
• Transparency and Disclosure Requirements :-
(1) An NBFC-P2P shall be required to disclose
the following:
– to the lender:
• details about the borrower/s including personal
identity, required amount, interest rate sought andidentity, required amount, interest rate sought and
credit score as arrived by the NBFC-P2P
• details about all the terms and conditions of the loan,
including likely return, fees and taxes
– to the borrower:
• details about the lender/s including proposed amount,
interest rate offered but excluding personal identity
and contact details
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RBI Regulations related to P2P
• Transparency and Disclosure Requirements :-
– publicly disclose on its website:
• overview of credit assessment/score
methodology and factors considered;
• disclosures on usage/protection of data;• disclosures on usage/protection of data;
• grievance redressal mechanism;
• portfolio performance including share of non-
performing assets on a monthly basis and
segregation by age; and
• its broad business model.
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RBI Regulations related to P2P
• Transparency and Disclosure Requirements :
(2) NBFC-P2P shall ensure that the providing of
services to a participant, who has applied for
availing of such services, is backed by appropriate
agreements between the participants and the
NBFC-P2P. The agreements shall categoricallyNBFC-P2P. The agreements shall categorically
specify all the terms and conditions among the
borrower, the lender and the NBFC-P2P.
(3) The interest rates displayed on the platform
shall be in Annualized Percentage Rate (APR)
format.
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Technology Used?
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Professional
Opportunities?Opportunities?
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Professional Opportunities?
1. Professionals can come together and start a
business in Startup format and scale it to much
higher level. Government polices are favoring
startups.
2. Professional working with banking industry has2. Professional working with banking industry has
an opportunity to serve in New Age businesse
3. There will be huge requirement for Credit
Mangers, Compliance Officers
4. We professionals can be a guide to lenders to
identify proposals for lending
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Overview of P2P
PlatformPlatform
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On P2P Platform we will able to check complete profile of
Borrower before funding.
Loan – Case Study 1 – Low Interest Rate
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We can check Cibil Score, Business & Personal Details, Credit
History , Avg Qty Bank Balance, Avg Yearly Income, etc….
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On P2P Platform we will able to check complete profile of
Borrower before funding.
Loan – Case Study 2 – Medium Risk
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We can check Cibil Score, Business & Personal Details, Credit
History , Avg Qty Bank Balance, Avg Yearly Income, etc….
CA. NIMESH DEDHIA, PND WEALTH
MANAGEMENT IMF LLP, 9820944648
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Any Questions?

Thank you
By
CA Nimesh Dedhia
PND WEALTH MANAGEMENT IMF LLP
Mobile: 982049948, Email: pndwealth@gmail.com
CA. NIMESH DEDHIA, PND WEALTH
MANAGEMENT IMF LLP, 9820944648
24/11/2019 40