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With reference to the Peer-to-Peer (P2P) lending, consider the following statements:
- It enables individuals to obtain loans directly from other individuals without the involvement of the financial institution.
- The minimum capital required to set up a P2P platform is Rs. 200 Crores.
Which of the statements given above is/are correct?
- a)1 Only
- b)2 Only
- c)Both 1 and 2
- d)Neither 1 nor 2
Correct answer is option 'A'. Can you explain this answer?
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Most Upvoted Answer
With reference to the Peer-to-Peer (P2P) lending,consider the followin...
After digital payments and digital lending, the Reserve Bank of India is looking closely at platforms that facilitate direct, or peer-to-peer (P2P), lending between individuals.
- It is done through a website that connects borrowers and lenders directly.
- Those who want to lend money, open an account with a P2P platform as a lender. And those who require a loan register themselves as a borrower.
- It enables individuals to obtain loans directly from other individuals, cutting out the financial institution as the middleman.
- In 2017, the Reserve Bank of India brought this service under its regulatory purview.
- Only an NBFC can register as a P2P lender with the permission of RBI. Every P2P lender should obtain a certificate of registration from the RBI.
- The minimum capital requirement to set up a P2P platform is fixed at Rs. 2 Crores.
Hence only statement 1 is correct.
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With reference to the Peer-to-Peer (P2P) lending,consider the followin...
Answer:
Introduction:
Peer-to-Peer (P2P) lending is a platform that enables individuals to obtain loans directly from other individuals without the involvement of a traditional financial institution. It has gained popularity in recent years as an alternative to traditional banking systems. Let us evaluate the given statements to determine their accuracy.
Statement 1: It enables individuals to obtain loans directly from other individuals without the involvement of the financial institution.
This statement is correct. P2P lending platforms connect borrowers with lenders directly, without the need for a traditional financial institution. These platforms act as intermediaries, facilitating the lending process between individuals. Borrowers can create loan listings on these platforms, specifying the loan amount and interest rate they are seeking. Lenders, on the other hand, can choose to fund these loans based on their risk appetite and return expectations. The P2P platform ensures the loan agreement, repayment schedule, and collection of repayments.
Statement 2: The minimum capital required to set up a P2P platform is Rs. 200 Crores.
This statement is incorrect. The minimum capital requirement to set up a P2P lending platform in India is not Rs. 200 Crores. The Reserve Bank of India (RBI) has set the minimum net owned funds (NOF) requirement for P2P platforms at Rs. 2 Crores. This is significantly lower than the amount mentioned in the statement. The NOF requirement ensures that P2P platforms have adequate financial resources to operate efficiently and manage risks.
Conclusion:
In conclusion, the correct statement is that P2P lending enables individuals to obtain loans directly from other individuals without the involvement of a financial institution. However, the second statement regarding the minimum capital requirement for setting up a P2P platform is incorrect. The minimum net owned funds requirement set by the RBI is Rs. 2 Crores, not Rs. 200 Crores as mentioned in the statement.
Introduction:
Peer-to-Peer (P2P) lending is a platform that enables individuals to obtain loans directly from other individuals without the involvement of a traditional financial institution. It has gained popularity in recent years as an alternative to traditional banking systems. Let us evaluate the given statements to determine their accuracy.
Statement 1: It enables individuals to obtain loans directly from other individuals without the involvement of the financial institution.
This statement is correct. P2P lending platforms connect borrowers with lenders directly, without the need for a traditional financial institution. These platforms act as intermediaries, facilitating the lending process between individuals. Borrowers can create loan listings on these platforms, specifying the loan amount and interest rate they are seeking. Lenders, on the other hand, can choose to fund these loans based on their risk appetite and return expectations. The P2P platform ensures the loan agreement, repayment schedule, and collection of repayments.
Statement 2: The minimum capital required to set up a P2P platform is Rs. 200 Crores.
This statement is incorrect. The minimum capital requirement to set up a P2P lending platform in India is not Rs. 200 Crores. The Reserve Bank of India (RBI) has set the minimum net owned funds (NOF) requirement for P2P platforms at Rs. 2 Crores. This is significantly lower than the amount mentioned in the statement. The NOF requirement ensures that P2P platforms have adequate financial resources to operate efficiently and manage risks.
Conclusion:
In conclusion, the correct statement is that P2P lending enables individuals to obtain loans directly from other individuals without the involvement of a financial institution. However, the second statement regarding the minimum capital requirement for setting up a P2P platform is incorrect. The minimum net owned funds requirement set by the RBI is Rs. 2 Crores, not Rs. 200 Crores as mentioned in the statement.
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With reference to the Peer-to-Peer (P2P) lending,consider the following statements: It enables individuals to obtain loans directly from other individuals without the involvement of the financial institution. The minimum capital required to set up a P2P platform is Rs. 200 Crores.Which of the statements given above is/are correct?a)1 Onlyb)2 Onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'A'. Can you explain this answer?
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With reference to the Peer-to-Peer (P2P) lending,consider the following statements: It enables individuals to obtain loans directly from other individuals without the involvement of the financial institution. The minimum capital required to set up a P2P platform is Rs. 200 Crores.Which of the statements given above is/are correct?a)1 Onlyb)2 Onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'A'. Can you explain this answer? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about With reference to the Peer-to-Peer (P2P) lending,consider the following statements: It enables individuals to obtain loans directly from other individuals without the involvement of the financial institution. The minimum capital required to set up a P2P platform is Rs. 200 Crores.Which of the statements given above is/are correct?a)1 Onlyb)2 Onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for With reference to the Peer-to-Peer (P2P) lending,consider the following statements: It enables individuals to obtain loans directly from other individuals without the involvement of the financial institution. The minimum capital required to set up a P2P platform is Rs. 200 Crores.Which of the statements given above is/are correct?a)1 Onlyb)2 Onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'A'. Can you explain this answer?.
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