This note is in light of the Reserve Bank of India notification dated 4th October 2017 that requires all Peer to Peer Lending Platforms in India to register as NBFCs (Non Banking Financial Institutions).
This is a much anticipated development and will play a crucial role in regulating the expanding market for peer to peer lending. The key takeaways from this notification are as follows:
- No non-banking institution other than a company shall undertake the business of Peer to Peer Lending Platform.
- Every company seeking registration with the Bank as an NBFC-P2P shall have a net owned fund of not less than rupees twenty million or such higher amount as the Bank may specify.
The notification also requires that entities, who wish to conduct Peer to Peer lending or are already doing Peer to Peer lending, apply for a certificate of registration to carry on the activities within 3 months of the notification.
As you are aware, Rang De is a not-for-profit entity and our mission is to serve financially excluded communities through low cost credit. Our network of 12000+ supporters have contributed capital, with hopes of nominal or no financial gains, to help the cause of poverty alleviation and women empowerment. Your support has been integral in allowing us to provide loans worth more than Rs 64 crore to low income families across India.
We are evaluating all our options presently and weighing the pros and cons of each option that is available to us. We want to assure you that whatever decisions we take post this RBI notification, we will safeguard the interests of our social investors and the communities that work with us.
While we deliberate on our next steps, please feel free to reach out to me at email@example.com in case you have any questions or concerns.
We look forward to your continuing support.
Co-founder & CEO