The Reserve Bank of India for the first time proposed rules for peer-to-peer lending, seeking to regulate a growing sector with potential measures including requiring minimum capital of 20 million rupees ($301,023.48) or prohibiting them from promising "extraordinary returns."
The RBI also proposed on Thursday that only those defined as companies engage in peer-to-peer lending and said it may categorise firms in the growing sector as non-banking financial companies.
Peer-to-peer lending has been growing globally, including in India, where only a limited segment of the population has access to bank finance.
The central bank sought feedback to its proposals from the public by May 31.
For draft proposals see: bit.ly/2450Mzf
($1 = 66.4400 rupees)
(Reporting by Devidutta Tripathy and Suvashree Dey Choudhury; Editing by Rafael Nam)