1. Eligibility Criteria to Register as NBFC-P2P
No non-banking institution other than a company shall undertake the business of Peer to Peer Lending Platform. No NBFC-P2P shall commence or carry on the business of a Peer to Peer Lending Platform without obtaining a Certificate of Registration (hereinafter referred to as “CoR”) from the Bank. Provided that an entity carrying on the business of a Peer-to-Peer Lending Platform as on the effective date of these directions, can continue to do so, subject to the conditions
Companies that are undertaking the business of Peer to Peer Lending Platform as on the date of effect of these directions i.e 4th Oct 2017, shall apply for registration as an NBFC-P2P to the Bank within 3 months from that date. Such companies, which have applied to the Bank for registration as an NBFC – P2P, shall be permitted to continue the business of a Peer to Peer Lending Platform till their application for issuance of CoR is rejected, subject to such conditions, including winding down of business, as the Reserve Bank may impose.
(iii) 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.
2. Process of Registration
- Make an application– Every existing and prospective NBFC-P2P shall make an application for registration to the Department of Non-Banking Regulation, Mumbai of the Bank, in the form which will be specified by the Bank for the purpose. Existing NBFC-P2Ps shall apply within three months from the issuance of these Directions dated 4th Oct 2017.
- Condition to be fulfilled : The Bank, for the purpose of considering the application for registration, shall require the following conditions, among others, to be fulfilled:
a. The company is incorporated in India
b. The company has the necessary technological, entrepreneurial and managerial resources to offer such services to the participants;
c. The company has the adequate capital structure to undertake the business of Peer to Peer Lending Platform;
d. The promoters and the Directors of the company are fit and proper;
e. The general character of the management of the company is not prejudicial to the public interest;
f. The company has submitted a plan for, or implemented, a robust and secure Information Technology system;
g. The company has submitted a viable business plan for conducting the business of Peer to Peer Lending Platform;
h. Public interest shall be served by the grant of CoR;
i. Any other condition as may be specified by the Bank, fulfillment of which, in the opinion of the Bank, is necessary to ensure that the commencement of or carrying on the business in India shall not be prejudicial to the public interest.
In case of prospective NBFC-P2Ps
(iii) Principle approval :-The Bank may, after being satisfied that the conditions specifiedare fulfilled, grant in-principle approval for setting up of a Peer to Peer Lending Platform, subject to such conditions which it may consider fit to impose.
(iv) validity of the in-principle approval :- The validity of the in-principle approval issued by the Bank will be twelve months from the date of granting such in-principle approval.
(v) Terms of grant of in-principle approval:-Within the period of twelve months, the company shall put in place the technology platform, enter into all other legal documentations required and report position of compliance with the terms of grant of in-principle approval to the Bank.
(vi) Grant a CoR as an NBFC–P2P :- The Bank may, after being satisfied that the entity is ready to commence operations, grant a CoR as an NBFC–P2P, subject to conditions as deemed fit by the Bank.
In case of existing NBFC-P2Ps
(vii)Application:- Companies that are undertaking the business of Peer to Peer Lending Platform, as on the date of effect of these directionsdated 4th Oct, 2017, shall apply for registration as an NBFC-P2P to the Bank within 3 months from that date. Such companies, which have applied to the Bank for registration as an NBFC – P2P, shall be permitted to continue the business of a Peer to Peer Lending Platform till their application for issuance of CoR is rejected, subject to such conditions, including winding down of business, as the Reserve Bank may impose.
(viii) Cancellation Of CoR Granted :-The Bank may cancel the CoR granted to an NBFC-P2P, if such company –
- ceases to carry on the business of Peer to Peer Lending Platform in India; or
- has failed to comply with any condition subject to which the CoR has been issued to it; or
- is no longer eligible to hold the CoR; or
- at any time fails to fulfill any of the conditions referred to in paragraphs 5(2)(ii) and 5(2)(v); or
- fails to –
(i) comply with any Direction issued by the Bank; or
(ii) maintain accounts, publish and disclose its financial position in accordance with the requirements of any law or any Direction or order issued by the Bank; or
(iii) submit or offer for inspection its books of account or other relevant documents when so demanded by the Bank.
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