Shreedar- Some good insights here. Didn’t think I’ll be reading about P2P companies, so this is a welcomed change. Hope you’re well this week? Cheers, -Thalia
I am not sure what problem this regulation is trying to solve? Lenders earn high interest and get flexibility, borrowers get loan when they wouldn't otherwise, platform makes money. Based just on what you wrote, and not being financial expert, this doesn't seem useful to me, and more micro-managing regulation for sake of it.
Makes sense to me. They can’t act like banks without being subject to the same regulations that banks are. Since they aren’t, they need to make additional compliance’s.
You're oversimplifying the bank–customer relationship.
Banks can create money to lend. Banks make an agreement with the depositor; they make a separate agreement with the lenders. P2P is neither: a P2P platform cannot use the deposit to do anything other than lending, but a bank can.
When P2P lending platforms offer guarantees they cannot keep, a regulator is supposed to prevent them. When things go bad, all sympathy will be for the “poor depositors” and heat on the regulator (and the failed platforms).
RBI is doing the right thing. If this scares many people away, they never were the target audience for this anyway.
People want more interest without taking any risk not realizing another covid like issue and all this p2p guarantee would fall flat that's why rbi did it
Shreedar- Some good insights here. Didn’t think I’ll be reading about P2P companies, so this is a welcomed change. Hope you’re well this week? Cheers, -Thalia
I am not sure what problem this regulation is trying to solve? Lenders earn high interest and get flexibility, borrowers get loan when they wouldn't otherwise, platform makes money. Based just on what you wrote, and not being financial expert, this doesn't seem useful to me, and more micro-managing regulation for sake of it.
Makes sense to me. They can’t act like banks without being subject to the same regulations that banks are. Since they aren’t, they need to make additional compliance’s.
You're oversimplifying the bank–customer relationship.
Banks can create money to lend. Banks make an agreement with the depositor; they make a separate agreement with the lenders. P2P is neither: a P2P platform cannot use the deposit to do anything other than lending, but a bank can.
When P2P lending platforms offer guarantees they cannot keep, a regulator is supposed to prevent them. When things go bad, all sympathy will be for the “poor depositors” and heat on the regulator (and the failed platforms).
RBI is doing the right thing. If this scares many people away, they never were the target audience for this anyway.
People want more interest without taking any risk not realizing another covid like issue and all this p2p guarantee would fall flat that's why rbi did it