The Reserve Bank of India (RBI) imposed a cumulative monetary penalty of Rs 76.6 lakh on four companies—Faircent, Finzy, Visionary Financepeer, and Rang De P2P Financial Services Limited — for non-compliance with the Non-Banking Financial Company – Peer to Peer Lending Platform (NBFC-P2P) (Reserve Bank) Directions, 2017, as per four press releases on its website.
The decision follows RBI’s scrutiny of the companies’ operations in September 2023 and their responses to the notices issued by the apex bank.
Why were the companies fined?
FINZY (BRIDGE FINTECH SOLUTIONS PRIVATE LIMITED)
Finzy is facing a monetary penalty of Rs 10 lakh for disbursing loans to individual borrowers without seeking specific approval of individual lenders and for failure to conduct periodic reviews of compliance with the Fair Practices Code. RBI also noted that the company undertook partial credit risk, going beyond the ‘Scope of Activities’ for NBFC-P2P companies. Further, Finzy excluded clauses highlighting RBI’s ‘right to inspection’ of service providers in its agreement with the latter while failing to undertake an annual review of service providers.
visionary financepeer private limited
Akin to Finzy, Visionary Financepeer undertook partial credit risk, and flouted norms for several loan disbursals and drafting agreements with service providers. Additionally, the company failed to disclose borrowers’ details to the lenders and missed the inclusion of a “Board-approved” policy for the pricing of its services. For these violations, RBI imposed a penalty of Rs 16.60 lakh.
faircent (fairassets technologies India Private Limited)
RBI’s investigation disclosed that Faircent failed to undertake and disclose borrowers’ credit assessment and risk profiles to lenders. The company also took partial credit risk by foregoing the management fee, either partially or fully, exceeding the ‘Scope of Activities’ listed under the guidelines. Finally, Faircent violated the provisions of the ‘Fund Transfer Mechanism’ by allowing repayments to lenders via fresh funds provided by new or existing lenders instead of the typical repayment from a specific borrower to a specific lender. Faircent is facing the highest monetary penalty, amounting to Rs 40 lakh.
rang de p2p financial services LIMITED
RBI’s scrutiny found this NBFC disbursing loans to individual borrowers without specific approval of individual lenders, leading the central bank to fine Rang De Rs 10 lakh.
MediaNama reached out to the NBFCs to get their comments and will update the story as soon as we hear from them.
What P2P Lending Guidelines did the NBFCs violate?
RBI imposed operational guidelines for P2P lending platforms in 2017, covering eligibility criteria, scope of activities, prudential norms, fund transfer mechanism, and disclosure requirements
Later, in August 2024 the central bank banned such platforms from advertising P2P loans as investment products, adding to its fair practices code for the sector alongside issuing other operating guidelines. The guidelines mandated that individual lenders must approve individual loan recipients during loan disbursal, a requirement infringed by all the NBFCs. Further, in assuming partial credit risk, the companies violated the RBI mandate of lenders bearing the entire loss of principal or interest or both (credit risk).
Moving forward, the guidelines allowed companies to maintain two escrow accounts- for lenders and borrowers for fund transfer provisions. For repayment of loans, the borrower must transfer funds from his bank account to his escrow account, which would later travel to the respective lender’s bank account, a process also flouted by Faircent. The company also failed to undertake ‘due diligence’ in disclosing the credit assessment of borrowers to prospective lenders as outlined by the 2017 guidelines.
Previous RBI scrutiny
RBI’s fines come amid ongoing scrutiny of P2P lending platforms. In January 2025, the RBI circulated a questionnaire to eight P2P lenders to gain operational insights about their compliance efforts with the updated guidelines.
Previously, in October 2024, the central bank issued show-cause notices to four P2P lending platforms for non-compliance with the guidelines, and to two for licence cancellations. Additionally, in August 2024 the RBI fined NBFC-P2P lending platforms LiquiLoans and LenDen Club for violating P2P lending and Digital Lending guidelines. Both companies were found partaking in the activities the above four NBFC-P2P platforms have been accused of, alongside routing the amounts disbursed and collected in loan accounts in the P2P platform via a ‘co-lending escrow account’ while allowing repayments to be routed through the ‘nodal account’ of a third party.
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