Currently there are 26 licensed players in the P2P lending sector but only 10–11 are actively operating.
The Reserve Bank of India (RBI) has intensified its scrutiny of peer-to-peer (P2P) lending platforms by seeking qualitative details about their operations, months after revising guidelines for these firms.
The central bank has sent a comprehensive questionnaire to eight financial technology companies in the P2P lending space.
In mid-December, the RBI issued an 18-point questionnaire, requiring responses by January 3. Many of the points included sub-questions requesting information about operations following the revision of P2P norms in August.
The questionnaire was sent to eight companies, including LiquiLoans, Monexo, i2iFunding, and IndiaP2P, among others, sources said. Business Standard has reviewed the document.
The questionnaire covered areas such as compliance with the updated P2P norms, adherence to the T+1 timeline, a pictorial representation of the flow of funds within firms, snapshots of advertisements for P2P loan products, and details on cross-selling practices, among others.
This request is separate from the quarterly data submissions required by the RBI, which include information on assets under management (AUM), outstanding loans, gross non-performing assets, and loan disbursements.
"This may be the first time such a detailed questionnaire on operations has been issued by the regulator. They likely want to assess the level of compliance with the revised guidelines from August last year. Normally, we submit quarterly numbers on disbursements," said the founder of a P2P firm.
Attempts to obtain responses from the management of the P2P lending firms were unproductive.
The RBI, based on disclosures on the platforms' websites, observed that many non-banking financial companies (NBFCs)-P2Ps failed to disclose losses incurred by lenders on principal, interest, or both. The regulator has asked companies to provide details on this aspect.
The RBI also observed instances of non-compliance after receiving complaints from pre-existing lenders. These complaints alleged that some NBFC-P2Ps disbursed loans to borrowers without prior approval from the lenders.
The central bank has also sought information on whether firms have adopted practices that violate the spirit of instructions regarding fund transfers.
The RBI added that if companies have ensured funds do not remain in escrow accounts for more than T+1 days, they must still provide details of funds, including the amounts that exceeded the T+1 limit as of December 15, 2024.
Under its revised guidelines, the RBI mandates that funds transferred into lenders' and borrowers' escrow accounts should not remain there for more than T+1 days, where 'T' is the date on which the funds are received.
"No loan shall be disbursed unless the lenders and the borrowers have been matched or mapped as per the board-approved policy framed under paragraph 8(1)(iii). Individual lenders must approve the respective recipients of loans, and all parties involved must sign the loan contract. Are any loans being disbursed in violation of these provisions?" the RBI asked in its email.
The regulator also required companies to submit portfolio performance data as of September 2024.
In August last year, the RBI flagged regulatory violations by some P2P lending platforms, highlighting that certain firms were promoting P2P lending as investment products, offering liquidity options, and functioning as deposit-takers or lenders instead of intermediaries.
The questionnaire also sought clarification on how P2P lending products were being marketed -- whether as lending products, investment products, or with alternative descriptions.
Currently, there are 26 licensed players in the P2P lending sector, but only 10–11 are actively operating. The industry's total AUM stands at Rs 11,000 crore.
In August, the P2P lending industry association requested the RBI to reconsider the T+1 mandate for clearing funds in escrow accounts.
© 2025