Soon after the Reserve Bank of India unveiled guidelines last October recognising the need for peer-to-peer (P2P) lending platforms in the country, the players came together to form a body — Association of P2P Lending Platforms.
The association will act as an industry body for the P2P lenders and as a grievance redress mechanism for both lenders and borrowers.
It will also come up with some self-imposed guidelines that would help bring more credibility to the segment that is growing at a faster pace at present.
The association is also expected to work in conjunction with the government and regulatory authorities on matters of compliance and to further the cause of financial inclusion.
Talking to BusinessLine , Bhavin Patel, the association’s secretary and founder of LenDenClub, said the association will hold its first meeting in February to discuss the guidelines and to impose some limitations on interest rates.
“The RBI has expressed concern that there should be some kind of cap or limitation on interest rates. We are looking to be at par with the rates that NBFCs provide at present. We will see to it that no player charges exorbitantly,” Patel said.
The NBFCs in the country cannot charge any borrower more than 35 per cent interest rate, as per RBI guidelines.
Other objectivesBesides, Patel said that the association will also work towards creating awareness about online P2P lending in India and ink strategic partnerships and collaborations with other stakeholders in the banking and finance industry, undertake research, collect data, and conduct surveys that will further the development of the P2P lending industry in India.
At present, there are about 15 P2P lending platforms in the country.
Shankar Vaddadi, Founder, i-lend.in, is the president of the association, Vinay Mathews, Founder and COO, Faircent.com, is the vice-president, and Bhuvan Rustagi, Co-Founder and COO, Lendbox.in, is the treasurer.