Following a regulatory crackdown by the Reserve Bank of India (RBI) on peer-to-peer (P2P) lending, MobiKwik’s Xtra investors are facing difficulties with withdrawals. This situation seems to have arisen due to a change in the withdrawal policy by the platform’s lending partner, Lendbox. Many users reported that this change was implemented without prior notification, and they raised their concerns on social media. Some users also alleged that Xtra transferred their investments to other borrowers without their consent, which is confusing because the new RBI rules do not affect existing investments.
The halt on instant withdrawals appears to be linked to the RBI’s updated master directions that prohibit P2P lending platforms from being marketed as investment products offering assured returns and liquidity options. According to the new guidelines, lenders on P2P platforms cannot invest more than Rs 50 lakh in total, and the maximum investment for a single borrower is capped at Rs 50,000.
MobiKwik’s Xtra allows users to earn up to 14% returns on their investments. The platform claims to have disbursed over 300,000 loans amounting to Rs 7,373 crore to date. Due to the updated regulations issued by the RBI on August 16, 2024, Lendbox, the lending partner, restructured its product, resulting in the discontinuation of anytime withdrawals. MobiKwik clarified that it only acts as a channel partner for Lendbox and stated that customers would receive their principal and interest as borrowers make repayments. This amount would be available for withdrawal on the 12th of every month, and the expected repayment schedule will soon be visible in the MobiKwik app.
Users of BharatPe’s 12% Club, another P2P lending platform, also reported issues with instant withdrawals on social media. Reports indicated that BharatPe had slowed down its onboarding process for new customers on the 12% Club. Additionally, onboarding by P2P lending platforms has declined by over 90% since the RBI’s directive, and some platforms, like Liquiloans, have already stopped accepting new users. Prominent P2P lending platforms in India, including LenDenClub, Faircent, 13Karat, and CRED Mint, are also adjusting to the new regulatory landscape.