LenDenClub has decided not to reapply for an NBFC license as it refocuses on its main P2P services.
The Reserve Bank of India (RBI) has returned LenDenClub’s application for an NBFC license, indicating it is hesitant to approve such licenses for P2P companies, sources said.
“The RBI rejected LenDenClub’s NBFC license when new rules came into effect in August 2024. The industry has faced many problems since then, with some major players halting new customer onboarding and winding down existing assets,” a source explained.
LenDenClub responded to queries from businessline, clarifying that the RBI returned its license application about a year ago. “They had applied for the license long before that, in May 2024, and completed the licensing steps last year. The application was returned as the regulator was working on sector rules, so it can be considered later,” said a company spokesperson.
‘No plans to reapply’
“The application wasn’t rejected outright. The RBI has three options: cancel, reject, or return. In this case, the application was returned,” they said. “Right now, we do not plan to reapply. We are focused on our main P2P business.” The RBI did not respond to businessline before the story was published.
Sources say that since the RBI’s new guidelines in August 2024, industry assets have dropped by 70-80 percent since March 2024. Many companies have stopped onboarding new customers because meeting RBI rules on T+1 settlement is hard. Also, the RBI requires individual lenders on P2P platforms to manually choose borrowers, making the platform less attractive to lenders. Despite this, LenDenClub claims it has kept assets under management around ₹1,000 crore from FY24 to FY25.
A senior former RBI official said, “Financial market rules must be clear. P2P is different from lenders’ operations. If P2P exchanges act as lenders, regulators will come down hard.”
They added, “Applying for an NBFC license is a long process. No one gets it within a year. The RBI checks if the applicant is suitable. If a license is returned, they usually explain why.”