Peer-to-peer (P2P) lending: What is it, and who regulates it in India?

The Reserve Bank of India (RBI) asked peer-to-peer (P2P) lending platforms to halt certain activities after inspections by the central bank found misleading sale practices and rule violations by such platforms.

Between June and September this year, the central bank conducted inspections of at least ten lenders. The RBI said some lenders failed to comply with the central bank’s guidelines. Following the inspection, the RBI found several violations, including improper re-lending of repaid funds and marketing of products as an alternative to bank deposits.