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An Overview of P2P License

Do you have a desire to dominate the P2P lending industry? If yes, you are at the right place. We will help you get a P2P license in India effortlessly.

A P2P (Peer to Peer) license, issued by the Reserve Bank of India (RBI), enables individuals to lend or borrow money directly, eliminating the need for a financial institution as an intermediary. P2P licensing has emerged as a popular method for managing copyrighted works.

The P2P license is a type of license agreement which provides report on the usage of work and pay agreed-upon compensation on a regular basis. Furthermore, a P2P license enables entities to legally borrow money directly without the involvement of traditional financial platforms, maintaining a secure and transparent environment for lenders and borrowers.

Speak to consultants at Corpbiz to obtain a P2P license in India within the desired time.

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An Overview of P2P License
What is Peer to Peer Lending?

What is Peer to Peer Lending?

The term P2P (Peer to Peer) basically denotes an online platform or portal that works as an intermediary between lenders and borrowers. The concept of peer to peer lending is a process of lending out an amount of money to people or business houses by way of online services, which assists match between the lenders and borrowers. Therefore, peer to peer lending has become one of the most comfortable and primary choices for everyone looking for venture funding.

Peer to Peer Lending is simply a mode of debt financing which permits the individuals to lend & borrow money without the actual participation and involvement of a financial institution as an intermediary. Furthermore, P2P lending industry is a strategy for obligation financing under directed by the Reserve Bank of India, thud making it a cost-effective strategy.

Benefits of Obtaining Peer to Peer Lending License

The benefits of obtaining peer to peer lending license are as discussed below:

Partnership Firm Registration Registration Advantages
Partnership Firm

1. Fast Processing of Application

Obtaining a P2P lending license enables a fast and convenient mode for individuals to lend and borrow money directly, streamlining the process without traditional financial intermediaries.

MSME Registration process

2. Lower Interest Rates

Obtaining a P2P license enables borrowers to secure easy loans at lower interest rates, in comparison to what they typically get from a regular bank or credit union.

Wide Business Opportunities

3. Alternative to Traditional Loan Facility

The grant of a P2P license is an alternative option for providing loans to traditional lenders. Moreover, the loans given by the Peer to Peer Lending Platforms are more flexible in nature than Traditional Loans;

Flexible Decision Making

4. Transparency & Control

The grant of a P2P license enables lending platforms to offer greater transparency and control towards lenders/ borrowers.

Tax Benefits

5. Increased Financial Diversity

The issuance of a P2P license ensures increasing financial diversity by offering different funding choices to individuals and businesses.

advantages MSME Registration

6. Market Credibility

The grant of a P2P license secures market credibility and expands the lending ecosystem for the lending platforms.

Eligibility Criteria for P2P Lending License in India

The RBI specified eligibility criteria required for getting a P2P lending license in India are as summarised below:

Checklist for Peer to Peer Lending Platforms in India

  • A company that wishes to acquire a Peer to Peer Lending License in India needs to first obtain a Certificate of Registration under the provisions of the Companies Act 2013.
  • Must possess a NOF (Net Owned Funds), i.e., minimum capital of Rs 2 crores.
  • Must comprise adequate capital structure to undertake the business of Peer to Peer lending platforms in India.
  • The applicant must submit a plan for the implementation of a robust and secure Information Technology Mechanism (System).
  • The applicant must make submission of a viable business plan in order to run a Peer to Peer Digital Lending Portal.
  • The general character of the company’s management must not be detrimental towards the interest of the general public.
  • All the proposed Directors and Promoters must be proper and fit.
  • If a company was already operating a P2P lending business before obtaining a Certificate of Registration became mandatory, it must comply with all the conditions & guidelines prescribed by the Reserve Bank of India (RBI).

Checklist: Who is Eligible for Seeking a P2P License in India?

  • The company incorporated & registered as a private or public Ltd. company in India
  • The company with a suitable amount of capital & equity structure
  • The company with all entrepreneurial, managerial, and technological resources
  • The company with a robust IT plan
  • The company with a business strategy that claims to serve the public interest
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Checklist for Partnership Firm Registration
Checklist for Partnership Firm Registration Online

Documents Required to Obtain P2P License in India

The list of documents required for obtaining a P2P license in India is as discussed below:

  • Company’s Certificate of Incorporation
  • Memorandum and Articles of Association
  • Company Acquired Entrepreneurial and Technological Resources
  • Information of Managers and Shareholders
  • Copy of Business Continuity Plan (i.e., Business Plan)
  • Audited Balance Sheet, Free from Transactions Initiated by Borrowers and Lenders
  • Net Worth Certificate
  • Fit and Proper Criteria Declaration
  • Website Source Code
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How to Get a P2P License in India?

The steps involved in the procedure for obtaining (Non-Banking Financial Institution) NBFC P2P License in India are as summarised below:

Partnership Firm Registration Process

Filing of Application

The applicant company seeking an NBFC P2P license in India must initially file an application form either online via the RBI's COSMOS portal or offline through the Department of Regulation at the Mumbai Branch of the RBI.

Document Submission

Now, the applicant company needs to submit the hard copy of the application drafted, together with the attached Documents at the regional office of the Reserve Bank of India Office.

Grant of In-Principal Approval

After being satisfied with the eligibility criteria and documents submitted, the RBI grants an in- principal approval for setting up a peer to peer lending platform in India.

Establish Technology Platform

Once the in-principal approval if granted, the applicant companies must establish a technology platform within 12 months starting the approval date.

Grant of Peer to Peer Lending License in India

After being satisfied with the investigations required for establishing compliance, the RBI shall grant Peer to peer lending license in India for carrying out peer to peer lending business.

Types of Peer to Peer Lending Platforms in India

The different types of fund transfer/ peer to peer lending platforms in India for obtaining a P2P license are classified below:

Income Tax Filing Requirements

Consumer Lending

Consumer lending is a short-term personal loan lending which provides for the purchase of cars, vacations, weddings, house repair, repayment of credit card dues, etc.

Filing of Income Tax Return

Small Business (SME) Lending

Small business (SME) lending is a lending mechanism designed to support small businesses by providing working capital, funds for expansion, and asset financing, typically secured with a founder’s personal guarantee.

Employment Tax & TDS Obligations

Commercial and Real Estate Lending

Commercial and real estate property lending provide secured loans for the purpose of personal mortgage, residential revolution, buy-to-lets, and developing commercial loans.

Characteristics of Peer to Peer Lending Platforms in India

The basic characteristics of Peer to peer lending platforms in India are as follows:

Partnership Deed Registration
  • Peer to Peer Lending Platforms in India are online portals that match the borrower with suitable lenders.
  • There is no requirement of having a prior relationship between the lender and borrower.
  • P2P lending platforms with a P2P license in India are not involved or engaged in any financial institution operating as an intermediary between lender and borrower.
  • All the lenders and the borrowers are free to make their decisions concerning the choice of borrowing and investment.
  • P2P lending platforms with a P2P license in India maintain transparency in their operations concerning both borrowers and investors.
  • Crucially implements strong security protocols, safeguarding sensitive financial and personal information of users.
  • Demonstrates financial stability, ensuring the platform’s ability to withstand economic downturns or unexpected challenges.
  • Have a system for resolving user complaints, maintaining trust, and addressing concerns promptly.

Mandatory Disclosures Required for P2P License in India

Some of the RBI-specified mandatory disclosures required for obtaining the P2P license in India are as discussed below:

Borrower Information

Borrower Information

The P2P lending platforms must record and maintain the information on borrowers, including their personal identity, credit scores, and interest rates.

Borrower Information

The P2P lending platforms must record and maintain the information on borrowers, including their personal identity, credit scores, and interest rates.

GST Return Filing

Portfolio Performance

The P2P platforms must make disclosure of their portfolio performance, including non-performing assets (NPAs), and losses incurred by lenders.

Portfolio Performance

The P2P platforms must make disclosure of their portfolio performance, including non-performing assets (NPAs), and losses incurred by lenders.

Credit Assessment

Credit Assessment

The P2P digital lending platforms must conduct credit assessment and make disclosure of credit scores, loan purpose, and terms concerning all the potential borrowers/ lenders.

Credit Assessment

The P2P digital lending platforms must conduct credit assessment and make disclosure of credit scores, loan purpose, and terms concerning all the potential borrowers/ lenders.

Score Methodology

Score Methodology

The Peer to peer lending platforms in India must disclose the information concerning score methodology to access the creditworthiness of the borrowers.

Score Methodology

The Peer to peer lending platforms in India must disclose the information concerning score methodology to access the creditworthiness of the borrowers.

Disclosure on Data Protection

Disclosure on Data Protection

The Peer to peer lending platforms in India must make disclosure concerning the usage of protection of data to safeguard the interests of borrowers and lenders.

Disclosure on Data Protection

The Peer to peer lending platforms in India must make disclosure concerning the usage of protection of data to safeguard the interests of borrowers and lenders.

Grievance Redressal Mechanism

Grievance Redressal Mechanism

The P2P platform must comply with and make disclosure concerning the decision of the RBI- Integrated Ombudsman Scheme, 2021.

Grievance Redressal Mechanism

The P2P platform must comply with and make disclosure concerning the decision of the RBI- Integrated Ombudsman Scheme, 2021.

Portfolio Performance

Portfolio Performance

The P2P platform must make disclosure of performance of the portfolio, including share of non-performing assets on a monthly basis and segregation by age.

Portfolio Performance

The P2P platform must make disclosure of performance of the portfolio, including share of non-performing assets on a monthly basis and segregation by age.

Shares of Non-Performing Assets

Shares of Non-Performing Assets

Peer to peer lending platforms in India are required to make monthly disclosure of Non-Performing Assets (NPAs) to ensure transparency and support lenders in decision-making.

Shares of Non-Performing Assets

Peer to peer lending platforms in India are required to make monthly disclosure of Non-Performing Assets (NPAs) to ensure transparency and support lenders in decision-making.

Broad Business Model

Broad Business Model

When applying for a P2P license, platforms must make a broad disclosure business model to ensure compliance with regulatory requirements and fair practices and manage risks.

Broad Business Model

When applying for a P2P license, platforms must make a broad disclosure business model to ensure compliance with regulatory requirements and fair practices and manage risks.

Scope of Activities of P2P Platform after Getting P2P License

The scope of activities, defining what is permitted and what is not permitted by the peer to peer digital lending platforms in India after getting a P2P license are as follows:

 

Activities Allowed by P2P Platforms with a P2P Lending License

  • The business model offers an online platform to all the participants involved in the process of peer-to-peer lending, thereby acting as their intermediary.
  • The peer-to-peer lending business is not allowed to raise deposits under the provisions of the Companies Act 2013 or Section 45 I (bb) of the RBI Act.
  • The peer-to-peer lending company with a P2P lending license must adhere to all the legal necessities applicable to the engaged participants under the pertinent laws.
  • It is compulsory for all peer-to-peer lending companies to store and process all data concerning their activities and participants on hardware situated within India.
  • The NBFC peer-to-peer lending business is permitted to lend only clean loans.

Activities Not Permitted by P2P Platforms

  • The peer-to-peer lending business is not permitted to lend money to themselves.
  • The NBFC peer-to-peer lending license holder must not raise deposits as defined in the Act.
  • The peer-to-peer lending business is not permitted to provide or arrange any credit enhancement or credit guarantee.
  • The peer-to-peer lending digital platform is not permitted to facilitate or permit any secured and safe lending associated with their online platform.
  • The peer-to-peer lending digital platform is not permitted to hold any funds collected from lenders (for the purpose of lending) or from borrowers (for the purpose of servicing loans) in their own annual balance sheet.
  • The peer-to-peer lending companies are not permitted to cross-sell any product or item except for loan-specific insurance products.
  • The NBFC peer-to-peer digital lending platform is not permitted to have an international flow of funds.

Difference between Crowd Funding & P2P Lending

Have a look over the key differences between crowd funding and peer to peer lending, as discussed below:

S. No. Aspect Crowd Funding Peer to Peer Lending
1. Meaning Crowd funding is an online platform which allows individuals and businesses to raise money from a large number of investors. Peer to Peer lending is a type of lending mechanism which allows individuals to borrow & lend money to each other in the absence of an intermediary institution.
2. Parties Involved Three (3) parties/actors: project initiator (who initiates the idea of fund), individuals/group (who support the idea), and the organization (the platform that brings parties together). Two (2) parties: borrower and lender, matched through an online marketplace.
3. Business Model Equity-based business model Loan-based business model
4. Return on Investment No fixed monetary returns. However, depends upon the successful performance of the borrower. Fixed monetary returns subject to payment of interest on loans.
5. Examples Startup funding, social or charity campaigns, equity crowdfunding, product pre-sale. Personal loans, SME/business loans, education loans, etc.

Responsibilities of P2P Platforms with a P2P License

The responsibilities of P2P platforms with a P2P license in India are as discussed below:

  • Carry out risk profiling, credit assessment, and disclosure of listed borrowers.
  • Get explicit and prior consent to access participants’ credit information.
  • Maintain paperwork such as loan agreements and other pertinent documents.
  • Offer services concerning the recovery of loans originated on the platform.
  • Facilitate loan origination, listing, repayment, and disbursement process.
  • Regular reporting and auditing to concerned authorities.
  • Stay abreast of technological, innovative, and financial advancements.
  • Adhere to local financial regulations such as AML, KYC, and data protection requirements.
  • Undertake due diligence on its proposed participants before approving them on the P2P platform.
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Why Trust Corpbiz for Peer to Peer Lending License in India?

Expert Consultation

10+ Years of Experience

Our consultants at Corpbiz have more than 10 years of experience in the space of peer to peer lending license in India.

Time Efficiency

75% Market Share

We are ruling the digital lending industry with a healthy market share of 75%, the best in the trade.

Paperwork & Documentation

Simplified Legal Assistance

We at Corpbiz hold a team of experts that ensures simplifying the legal necessities required for securing a peer to peer lending license in India.

Compliance Management

24/7 Dedicated Support

We are readily available to resolve your queries in the path of acquiring peer to peer lending license in India.

Customized Solutions

Saved 15 Lakh+ Hours of Entrepreneurs

We have successfully saved 15,00,000+ hours of entrepreneurs with our expert guidance and regulatory recommendations to get a P2P lending license.

Saved 50 Lakh+ Hours

Regulatory Understanding

Our team of experts at Corpbiz ensures compliance with recent regulations and guidelines released by the financial authorities for P2P license.

24/7 Support

Proven Track Record

We at Corpbiz use a dedicated platform to track and provide real-time updates on the progress of the application filed with the authorities.

1 Decade of Experience

Post-Licensing Assistance

Our team at Corpbiz provides continuous assistance post securing a P2P license, guaranteeing ongoing adherence, disclosures, etc.

Market Share

Up to 30% Reduction in Compliance Burden

We ensure that we have assisted in reducing compliance burden up to 30% for acquiring P2P lending license.

Frequently Asked Questions on P2P License

Have a look at the answers to the most asked questions on P2P license.

The validity of in principal approval given by the RBI for P2P lending license is 12 months from the date of approval granted.

A P2P license is an authorization issued by the Reserve Bank of India (RBI). It further enables individuals to lend or borrow money directly, eliminating the need for a financial institution as an intermediary.

Peer to peer digital lending platforms in India are lending mechanism which connects borrower and lender with each other. Peer to Peer lending has become a primary and comfortable choice of most of the start-ups and entrepreneurs during the initial days of their business when they are looking for venture funding. On this stage, businesses are free to obtain money without the involvement of any financial intermediary/ institution.

Yes, P2P lending is a safer option for businesses. However, the safety of P2P lending depends upon the factor like lending money to the low-risk borrowers after proper verification.

The eligibility criteria required for obtaining a peer to peer lending license in India are as discussed below:
  • A company registered and incorporated in India.
  • The applicant must have technological, entrepreneurial, and managerial resources.
  • The applicant company must possess a satisfactory capital structure.
  • The proposed directors of the company must satisfy the fit and legitimate models.
  • There must be a legitimate arrangement for a proficient Information Technology System.
  • A Feasible Business Plan.
  • A process to serve in public interest.
  • The applicant must have a net owned fund of Rs. 2 crores.

The market size of global P2P lending mechanism is valued at USD 153 billion in 2022, projecting to reach USD 1.7 trillion having a growth rate of 27.5% CAGR by 2032. However, the Indian P2P lending market is projected to reach USD 10.5 billion by 2026. The demand for P2P lending license is expected to witness an all-time high.

No, cash transaction is not permitted for the transfer of funds under the P2P lending mechanism.

The process to get peer to peer lending license in India is discussed below:
  • Step 1: Filing of Application at the official website of the RBI (COSMOS).
  • Step 2: Submission of Mandatory Documents at the RBI Office.
  • Step 3: Grant of In-Principal Approval by the RBI.
  • Step 4: Establish a Technology Platform such as a Website/Mobile App Work Flow.
  • Step 5: Grant of P2P License from the Concerned Authorities.

The pros, i.e., advantages of peer to peer lending platforms for both the borrowers and lenders, are as discussed below:
  • From the Borrowers’ point of view
    • Fixed rate of interest
    • Simple and fast processing of the application
    • Lower service fees than other financial institutions
  • From Lenders’ point of view
    • Higher returns to shareholders, depending upon the type of risk
    • Investment diversification
    • Direct communication with borrowers

Yes, businesses can make money out of P2P lending. The source of income in P2P lending business comprises of success fees, premium membership fees, and secondary market transaction fees. Also, the P2P business modes, generates income through credit scoring model and financial literacy tools.

As of now, P2P lending is legal and managed by the Reserve Bank of India. The central bank issued a consultation paper on peer to peer lending in the year 2017. Currently, there exists more than 263 RBI-registered P2P NBFC platforms directly involved and connecting borrowers in India.

P2P stands for Peer to Peer, which is lending mechanism working without the involvement of any financial intermediary or institution in India.

The Reserve Bank of India (RBI) is the legal authority responsible for regulating the P2P lending license in India.

Yes, Paytm is a Peer to Peer user-friendly interface, providing low transaction cost and enhanced security features. It has a valid peer to peer lending license.

About the Author

NE
Neha Dawra

Legal Researcher

Written by Neha Dawra. Last updated on May 28 2026, 12:08 PM

Neha Dawra has 4+ years of experience in legal research and intellectual property advisory. Her expertise lies in analyzing IP laws, drafting structured legal content, and simplifying complex registration procedures into clear, simple insights.

 

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