Faircent is India's first peer-to-peer (P2P) lending platform to receive a Certificate of Registration (CoR) as an NBFC-P2P from the Reserve Bank of India (RBI).

Faircent.com provides a virtual marketplace where borrowers and lenders can interact directly, without having to go through the traditional financial intermediaries like banks, who have become such behemoths in today’s time that they dictate all terms and conditions for both borrowers and lenders.

Excerpts from an interview with Rajat Gandhi, founder and CEO, Faircent.

BW CIO: Some finance regulators have not given a legal definition of P2P lending. How are you doing this?

Rajat Gandhi: The RBI, in its regulatory guidelines announced in October 2017, clearly seek to define the regulatory framework within which NBFC-P2P can operate. 

They cover permitted activity, prudential regulations on capital, governance, fund transfer mechanism, data security, business continuity plan (BCP), regulatory reporting and customer interface apart from other operative parameters. 

Faircent.com was the first platform in India to meet all guidelines prescribed by RBI and receive the NBFC-P2P certification in May, this year. This is a validation of the business model that we have painstakingly built over the last five years. 

There is no risk-exposure on our balance sheets, we have never lent from our books and as a practice, stayed away from guaranteed schemes such as principal protection fund. We implemented the escrow account system, even before the RBI mandated is as compulsory. 

All financial transactions on our platform are undertaken through an escrow account under the trusteeship of ITSL (an IDBI Trusteeship Services Ltd). Borrowers are evaluated by our fully-automated credit evaluation mechanism across more than 400 data points to understand their ability, stability and intent to repay before they are listed on the platform. 

Physical verification is undertaken, both, at the home and the office. All the data pertaining to borrowers is transparently mentioned on their profile to enable the lenders to take informed decisions. Statistical and research analysis is shared periodically. We take pride in following the best practices and processes to ensure the best value for all our stake-holders.

Click here to read the full interview: http://bwcio.businessworld.in/article/All-Financial-Transactions-on-Faircent-Conducted-through-Escrow-Account-Rajat-Gandhi-Faircent/26-06-2018-153010/