Peer to Peer lending
In India, peer-to-peer lending is currently unregulated. If you want to start such type of business then registering P2P lending platforms as non-banking financial companies (NBFCs). RBI has powers to regulate entities which are in the form of companies or cooperative societies. However, if the P2P platforms are run by individuals, proprietorship, partnership or Limited Liability Partnerships, it would not fall under the purview of RBI. Hence, it is essential that P2P platforms adopt company structure. The notification can therefore specify that no entity other than a company can undertake this activity. This will render such services provided under any other organisational structure illegal. Alternatively, the other forms of structure may be regulated by the State Governments.
What the law says
Section 45S of RBI Act prohibits an individual or a firm or an unincorporated association of individuals from accepting deposits, if his or its business wholly or partly includes any of the activities specified in clause (c) of section 45-I (i.e. activities of a financial institution); or if his or its principal business is that of receiving of deposits under any scheme or arrangement or in any other manner, or lending in any manner.
Contravention of Section 45S is an offence punishable under section 58B (5A) of RBI Act. As per the Act, ‘‘deposit’’ includes and shall be deemed always to have included any receipt of money by way of deposit or loan or in any other form, but does not include any amount received from an individual or a firm or an association of individuals not being a body corporate, registered under any enactment relating to money lending which is for the time being in force in any State. Since the borrowers and lenders brought together by a P2P platform could fall within these prohibitions, absence of regulation may lead to perpetrating an illegality. It is important that the guidelines would also prohibit the platforms being used for any cross-border transaction in view of FEMA provisions relating to transactions between residents and non-residents.
What you can do
1. Funds will have to necessarily move directly from the lender’s bank account to the borrower’s bank account to avoid the threat of money laundering.
2. Guidelines would also prohibit the platforms being used for any cross-border transaction in view of FEMA provisions relating to transactions between residents and non-residents.
For invest and distribute large scale of money, the idea mention in your query is not work properly and not feasibly in long time process.
The idea is applicable, the money can transfer to BRII and they distribute the money and pay the tax (But they also take money lending license) and they also return it by way of Gift to NRI.
But the main issue starts at the time of default of payment. How you can interfere in this transaction and how to recover the lented money from borrowers. More over some more difficulty is that every transaction above 2 laksh should be done through cheque or DD or bank transfer. The accountability is another issue. If get more time I will answer how it is possible to operate.