Mobikwik Xtra is a peer-to-peer (P2P) lending platform that partners with Lendbox to facilitate P2P lending across the country. However, Mobikwik and similar platforms were somewhat misleading their customers by advertising these platforms as offering a 12% fixed income opportunity with the ability to withdraw money anytime. As a result, the RBI had to step in and introduce a new set of guidelines for such companies and their customers, effective from August 16, 2024.
According to the "Master Direction - Non-Banking Financial Company – Peer to Peer Lending Platform," dated August 16, 2024:
Recently, Mobikwik closed its Flexi and Flexi Plus schemes, which offered a fixed 12% return with interest credited daily, and allowed lenders to withdraw the full or partial amount at any time. These features were against the core principles of P2P lending. In response, Mobikwik shut down the scheme and started partially following the new guidelines.
Why do I say Mobikwik is only partially following the guidelines? Shockingly, Mobikwik & Lendbox redistributed existing lenders' funds to new borrowers without the lenders’ consent. Lenders were not informed about the borrowers’ contact details or credit scores, nor were they given the option to choose borrowers based on their credit profiles—an evident violation of RBI guidelines.
Many lenders have already raised complaints with Mobikwik via phone and email, but according to them, Mobikwik has not resolved the issue. Some lenders have even voiced their concerns on Twitter. I have attached screenshots for your reference.
*These are just a few cases; there are hundreds of complaints available on Twitter.
Mobikwik & Lendbox both should be held accountable for these policy violations and should face action from the RBI.
What can lenders do?
If you’ve already raised the issue with Mobikwik and haven’t received a satisfactory response, I recommend filing a complaint with the RBI. Here’s how you can submit a complaint through the RBI banking ombudsman portal:
Share this post with as many people as possible to bring it to the attention of the relevant authorities, and hopefully, they will take strict action against such companies. I’m also posting this issue on Twitter & YouTube Community Post.
Tweet URL:
Update 25th Sept, 2024:
***Mobikwik P2P Investment Blunder***
Investors were expecting to receive their invested amounts, which Mobikwik had reinvested without their consent, on 12th September, as the platform showed the first payout date as 12th September. However, as per the rules, investors only received the amounts that borrowers had repaid. Many people had invested in a scheme that allowed anytime withdrawals, but citing RBI guidelines, Mobikwik changed the scheme terms. More specifically, they discontinued the old scheme, introduced a new one, and reinvested the original investors' money without their consent. How is this ethically or legally correct?
Mobikwik is blaming Lendbox for this.
The RBI is supposed to protect customers' interests, but where is the RBI now? Can they not see what is happening? I'm sorry to say, but the RBI is becoming joke day by day.
Related Tweet:
Update 27th Sept, 2024:
Mobikwik replied to one of my tweets and shared this link: https://promotions.mobikwik.com/inapp/faq/xtra/xtra.html
After reviewing the link, I’d like to highlight a few points:
"Was it necessary to apply these changes to existing Xtra investments, or could they have been limited to new investments?"
Based on recent regulatory clarifications, certain features of the product have been specifically disallowed, effective immediately, including the anytime/flexible withdrawal facility. All repayments will now be credited directly to lenders as borrowers make their payments. As a result, these changes apply to both existing and new Xtra investments.
"Why was my consent not taken for the change in Xtra?"
Since the clarifications and updates are effective immediately, changes to existing investments have been made whereby withdrawals must now be linked directly to borrower repayments. Borrower repayments—including both principal and interest—will be available for withdrawal to your bank account monthly, starting from the 12th of each month.
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First of all, Mobikwik didn’t inform individual lenders, which is a violation of the new RBI P2P guidelines. They are using the new RBI guidelines as an excuse, but as per the guidelines, they should have informed customers about their borrowers, matched credit profiles, and then lent the money. Other P2P investment platforms returned their customers’ money (for those who requested it) before the new guidelines were implemented. So, how are others managing without issues, but Mobikwik and Lendbox can’t?
According to the "Master Direction - Non-Banking Financial Company – Peer to Peer Lending Platform," dated August 16, 2024:
And
In simple terms, NBFC-P2P platforms will send the borrower's details, such as contact information, credit score, etc., to the lender. Only if the lender approves the borrowing request can the NBFC-P2P proceed with processing the loan.
Recently, Mobikwik closed its Flexi and Flexi Plus schemes, which offered a fixed 12% return with interest credited daily, and allowed lenders to withdraw the full or partial amount at any time. These features were against the core principles of P2P lending. In response, Mobikwik shut down the scheme and started partially following the new guidelines.
Why do I say Mobikwik is only partially following the guidelines? Shockingly, Mobikwik & Lendbox redistributed existing lenders' funds to new borrowers without the lenders’ consent. Lenders were not informed about the borrowers’ contact details or credit scores, nor were they given the option to choose borrowers based on their credit profiles—an evident violation of RBI guidelines.
Many lenders have already raised complaints with Mobikwik via phone and email, but according to them, Mobikwik has not resolved the issue. Some lenders have even voiced their concerns on Twitter. I have attached screenshots for your reference.
*These are just a few cases; there are hundreds of complaints available on Twitter.
Mobikwik & Lendbox both should be held accountable for these policy violations and should face action from the RBI.
What can lenders do?
If you’ve already raised the issue with Mobikwik and haven’t received a satisfactory response, I recommend filing a complaint with the RBI. Here’s how you can submit a complaint through the RBI banking ombudsman portal:
Share this post with as many people as possible to bring it to the attention of the relevant authorities, and hopefully, they will take strict action against such companies. I’m also posting this issue on Twitter & YouTube Community Post.
Tweet URL:
Update 25th Sept, 2024:
***Mobikwik P2P Investment Blunder***
Investors were expecting to receive their invested amounts, which Mobikwik had reinvested without their consent, on 12th September, as the platform showed the first payout date as 12th September. However, as per the rules, investors only received the amounts that borrowers had repaid. Many people had invested in a scheme that allowed anytime withdrawals, but citing RBI guidelines, Mobikwik changed the scheme terms. More specifically, they discontinued the old scheme, introduced a new one, and reinvested the original investors' money without their consent. How is this ethically or legally correct?
Mobikwik is blaming Lendbox for this.
The RBI is supposed to protect customers' interests, but where is the RBI now? Can they not see what is happening? I'm sorry to say, but the RBI is becoming joke day by day.
Related Tweet:
Update 27th Sept, 2024:
Mobikwik replied to one of my tweets and shared this link: https://promotions.mobikwik.com/inapp/faq/xtra/xtra.html
After reviewing the link, I’d like to highlight a few points:
"Was it necessary to apply these changes to existing Xtra investments, or could they have been limited to new investments?"
Based on recent regulatory clarifications, certain features of the product have been specifically disallowed, effective immediately, including the anytime/flexible withdrawal facility. All repayments will now be credited directly to lenders as borrowers make their payments. As a result, these changes apply to both existing and new Xtra investments.
"Why was my consent not taken for the change in Xtra?"
Since the clarifications and updates are effective immediately, changes to existing investments have been made whereby withdrawals must now be linked directly to borrower repayments. Borrower repayments—including both principal and interest—will be available for withdrawal to your bank account monthly, starting from the 12th of each month.
---
First of all, Mobikwik didn’t inform individual lenders, which is a violation of the new RBI P2P guidelines. They are using the new RBI guidelines as an excuse, but as per the guidelines, they should have informed customers about their borrowers, matched credit profiles, and then lent the money. Other P2P investment platforms returned their customers’ money (for those who requested it) before the new guidelines were implemented. So, how are others managing without issues, but Mobikwik and Lendbox can’t?
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