After having stopped onboarding of new customers post the Reserve Bank of India’s (RBI) August 16 amended master directions on peer-to-peer (P2P) lending platforms, large P2P players are contemplating winding down business and are seeking clarity on certain aspects from the diktat, multiple officials told businessline.

“We are also contemplating (winding down business). We have to keep all options open, if business becomes unsustainable or there is no scalability going forward, we have to keep multiple options open. We cannot keep trying something which we know cannot work,” said a top official at a large P2P company requesting anonymity.

“There is no grandfathering allowed of existing portfolio, as of now. This is a big problem because if we stop withdrawals entirely, it would have a major impact on customer base,” they said, adding that P2P players have requested the RBI and finance ministry officials for an appointment to discuss the broader impact of regulator’s amended norms.

Clarifications sought

The P2P players are seeking clarification on whether the fresh provisions be applied from a retrospective or prospective effect, and seeking relaxation on T+1 settlement diktat, allowing secondary market options like auto-invest, re-invest, among others. Industry members have requested the regulator to allow T+10 settlement cycle, instead of T+1.

The central bank’s August 16 directions essentially disallowed P2P companies from offering investment products with features like tenure-linked assured minimum returns and liquidity options, apart from introduction of T+1 settlement cycle.

“Right now most players are firefighting their own issues. Everyone is funded by an equity investor. They have lenders, borrowers and multiple stakeholder on their platform,” said a founder at a large P2P company.

What is regulator’s view

“The first thing that everyone wants to understand is what is the regulator’s vision on P2P lending. Do they not want P2P lenders to succeed...The regulator has chosen to make policy so tight that no one becomes eligible to even operate the business...,” they said, adding that the company has stopped onboarding new customers post new directions and that the overall portfolio of P2P players may shrink to ₹1,000 crore in 15 months from around ₹10,000 crore as of now.

Meanwhile, Bhavin Patel, CEO of LenDenClub, said the P2P platform — though seeing a fall in overall transactions — is witnessing around 60-65 per cent of volumes which it handled before the master directions on August 16. The company did not stop onboarding customers even for single day, he said, because its manual lending option was always open for all customers.

“Couple of pointers which remain open-ended and we want more clarity on is the T+1 timeline which looks little impractical and difficult to implement. That has been raised to the regulator as well. As a company we have decided to implement it and when we face challenge, we will convey the same to the regulator,” he said.

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