RBI Fines Four P2P Lending Platforms Rs 77 Lakh For Not Complying With Norms

The Reserve Bank of India has imposed a series of monetary penalties totaling nearly Rs 77 lakh on four peer-to-peer lending platforms for disbursing loans without the specific approval of individual lenders.

On Feb. 11, the RBI fined Fairassets Technologies India Pvt. as the company had not undertaken and disclosed credit assessment and risk profile of the borrowers to the prospective lenders, the central bank said in one of the releases on Friday.

It also took partial credit risk by foregoing the management fee partially or fully, which was not provided under the scope of activities for NBFC-P2P companies.

The company also did not comply with the RBI's directions on Fund Transfer Mechanism when it allowed repayments to lenders from fresh funds provided by new or existing lenders or through repayments pooled from the borrowers, rather than from a specific borrower to a specific lender. In September 2023, RBI had conducted an investigation of the company.

The RBI also imposed a fine of Rs 16.6 lakh on Visionary Financepeer Pvt. on Feb. 25. Apart from disbursing loans to individual borrowers without the specific approval of individual lenders, the company also did not ensure that each individual lender and borrower had signed a loan agreement.

Among a couple other reasons, Visionary Financepeer also did not disclose the required details of the borrowers to the lenders and did not have a board-approved policy for pricing of services provided by it. It also penalised Bridge Fintech Solutions Pvt. and Rang De P2P Financial Services with Rs 10 lakh each.

Peer-to-peer lending is a form of direct lending of money to individuals or businesses without an official financial institution participating as an intermediary in the deal. P2P lending is generally done through online platforms that match lenders with the potential borrowers