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Banning of Unregulated Deposit Schemes (UDS) to benefit P2P Lending Industry

Mumbai, 27 Feb 2019: The latest ordinance of the Banning of Unregulated Deposits (UDS) 2019, was passed by the government to provide a comprehensive mechanism to ban UDS as well as to protect the interest of depositors. This is in line with the Reserve Bank of India’s guidelines on the NBFC-P2P sector, issued in October 2017 to regulate the unorganized lending business in the country.

 

The latest ordinance focuses on unregulated deposits only. The essence of the ordinance is that the transactions that cannot be formally audit trailed will no longer be allowed. The appointed Competent Authority has right to inspect, examine documents, and even summon the involved individuals/parties.

 

With the ban on unregulated deposits, players of P2P lending industry are expecting that it will attract attention of such small investors to invest though regulated institutions like NBFC-P2P platforms that provide highly transparent environment under the guidance of the RBI. This will also motivate small borrowers to do transactions through certified financial institutions only.

 

“In the wake of new ordinance, P2P lending players are likely to gain ground and the ordinance will have a positive impact on P2P industry in long run. The industry is at nascent stage currently and such a positive step will help this lending industry to establish itself as one of the best investment option in the market. In India, a lot of people & SMEs are heavily dependent on informal resources for their needs where transparency has always been an issue. It is time for P2P lending players to move ahead with awareness campaigns to onboard such depositors to digital India economy through regulated platforms which are highly transparent and secured.”

 

“All unregulated deposits would now have regulated route that will not only help in boosting digital economy but will also help in increasing the taxable income. Needless to say, P2P lending industry is poised to be a USD 5 Bn industry by 2023 and can play a key role in financial inclusion & building a corruption free nation”, said Mr. Rajiv M Ranjan, Founder & CMD PaisaDukan.

 

“This ordinance will help P2P lending sector in more ways than one. Firstly, all transactions carried out on NBFC-P2P lending platforms are regulated by way of P2P master guidelines set by the RBI. I believe this will increase demand for formal credit and should be an upside for the P2P lending sector. NBFC-P2P lending platforms can become a formal route for many of the small-ticket informal transactions that are normally ridden with high transaction costs and significant collateral needs. P2P lending can finally emerge fully as a new asset-class for individual lenders in India”, said Mr. Sanjay Darbha, Founder & CEO of Hyderabad based P2P lending platform PeerLend.

 

“There are a many salaried individuals and SMEs who borrow from small brokers and payday lenders at a very high interest rates. All these small players who have enjoyed such lending business without legal norms would now fear the law and eventually seize to exist. We are covered under the ordinance, being a regulated player by the Reserve Bank of India and we strongly believe that there is an opportunity for P2P players to tap such loan seekers and provide them better services and interest rates. P2P will not only aggregate this disorganised lending segment but also create a great asset class for the common man. ,” said Mr. Dhiren Makhija, CEO of Bengaluru based P2P lending platform Cashkumar.

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PaisaDukan Welcomes the Widened Definition of Startup

Mumbai: Union Minister of Commerce & Industry, Mr. Suresh Prabhu brings breather for several startups that have received funds from Angel Investors or looking for funds. Government of India, recently announced the decision of easing the rules for startup by announcing a string of exemptions which included the contentious and much debated issue of Angel Tax. It was a much debated and was a long demanding step. Additionally, the widened definition of startups will also create business environment and will inspire new entrepreneurs to establish startups.

 

Consideration of an entity as startup upto 10 years from the date of incorporation / registration instead of existing 7 years & relief in turnover from 25 crore to 100 crore will help businesses to establish.

 

Simplification of the process for starups to get exemption on investment under section 56(2)(viib) of Income Tax Act, 1961 will help P2P lending industry which wasn’t so attractive for VCs & Angle investors due to low volume & higher operational cost. NBFC-P2P lending industry welcomes the announcement.

 

“The notification eliminates a major obstacle and clarification would help several startups in avoiding potentially significant tax challenges faced by startup and will allow them to focus on their core activities. However I would request Govt. of India to relook the section 68 of Income Tax, that will broaden the reforms,” said Mr. Rajiv M Ranjan, Founder & CMD PaisaDukan.

 

The Govt. of India has widened the definition of startups based on their incorporation date. Now an entity shall be considered as startup upto 10 years from the date of incorporation / registration instead of existing 7 years, relief in turnover from 25 crore to 100 crore and exemption on shares received up to an aggregate limit of Rs. 25 crore.

 

 

About PaisaDukan.com

www.paisadukan.com

Founded by Rajiv Ranjan, PaisaDukan.com is a leading Peer to Peer money lending platform, it is a solely owned marketplace of BigWin Infotech, has come into existence as a matchmaker of the FinTech industry. PaisaDukan.com provides a highly secured customer experience with their completely transparent, hassle free and user friendly digital platform for all the borrowing and investing needs. The brand announced its entry in July 2018 in the NBFC-P2P lending category as the first new entrant to receive Certificate of Registration (CoR) from the Reserve Bank of India (RBI).

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Compensation & Benefits (C&B) is gaining traction in India

Mumbai: In India, businesses are more focussed on paychecks than employee satisfaction. Millennials today are increasingly eyeing for jobs which offer a perfect work-life balance, flexibility and better scope for growth than just compensatory benefits.

 

The young professionals of today have so much to offer in terms of ideas, technical skills and sheer energy that employers are now involved in a cut-throat competition to acquire as well as retain highly skilled and young talents.

 

In the current age of a VUCA (Volatile, Uncertain, Complex & Ambiguous) business world, hiring the High Potential (HiPo) employees is as critical as retaining them.

 

Salary and related components only act as a tertiary factor to attract talent.  Employers who recognize and adapt to these changing requirements and overhaul their compensation and benefits strategies, shall lead and succeed in the future economy.

 

JobBuzz, India’s leading employer rating and review platform along with top HR leaders & consultants and several thought leaders in HR space deliberated upon the various new-age compensation & benefits strategies attracting the new-generation workforce.

 

The 3rd edition of JobBuzz C&B Conclave 2019 was held in Mumbai last week which was specifically designed for HR professionals looking for practical and effective strategies involving compensation and benefits challenges.

 

“Benefits were the focus area in the west for many years and slowly Indian organisations are realising the need of it. JobBuzz is an online platform where we record employee feedback about companies and get a lot of statistical information like what is making them happy, why they would want to stick to a company, why would they want to leave a company. C&B is very close to everyone’s heart whether we are an employee or employer”, said Sanjay Goyal, Vice President and Head – Product & Technology, TechGig.

 

Time is not far from when companies would have dedicated C&B departments focussing on what specific benefits out of the entire menu an employee would be interested in, that would be the future.

 

Artificial intelligence (AI) is transforming the HR industry and to reap its benefits it’s important to record the right data at the right point, Alexa is a good example.

  

“Some of the popular themes are – Friday lunch outside the office, Parking tickets, Toll tickets, while these are small benefits but it takes the irritant of your life. These are new trends to India and people are not fully aware of them,” concluded Mr Goyal.