HYDERABAD: Some peer-to-peer (P2P) lending startups are hoping that the central bank’s move to regulate the nascent sector’s business will help attract venture capitalists, who have stayed away from this quarter due to lack of guidelines.A P2P lending firm offers a platform for individual borrowers and lenders to transact without involving financial institutions.There are about 40 such entities in the country, according to Xeler8 , which tracks startup activity in the country. Mohandas Pai , who has backed Faircent, said the Reserve Bank of India ’s regulatory guidelines will bring clarity, which will attract more players and intensify competition.On the other hand, regulation may also lead to many players shutting shop if they’re unable to meet requirements such as maintenance of Rs 2-crore capital and an interest rate cap, which were published in the RBI’s discussion paper in May."I know of at least five startups from this space that will have to shut down once the final guidelines are out," said Sunil Kumar, founder, Bengaluru-based P2P startup Loan-Meet, which has been bootstrapped since it started operations last year.The final draft of the guidelines is expected in the next few weeks.The RBI has proposed that P2P lending startups should register as non-banking finance companies While players in this space are expecting at least six months to one year to comply with the regulations, it is not clear if they would be asked to put their business on hold during that period. One of the changes that many companies have requested in their feedback to the central bank is halving of the minimum capital requirement to Rs 1 crore.Companies like Hyderabad-based i-lend and Gurgaon-based Faircent claim they may not have to make major changes in their company structure because they have been self-regulatory since inception. But smaller and relatively newer companies may not be that lucky."Whether it is the `2-crore capital requirement, listing of delayed and default payments, interest rate cap or having an experienced person from the financial world on our advisory board, we are pretty much already in compliance with the guidelines," said Shankar Vaddadi, founder, i-lend, which recently included former chairman of Credit Information Bureau (India), S Santhanakrishnan, on its advisory board.The one norm they think could add value to their current structure is access to credit bureaus. Another proposal of RBI that has elicited objection is that lenders and borrowers should use direct transfer. "Direct transfer is cumbersome. We will need some sort of nodal account to ensure smooth functioning," said Vinay Mathews, founder, Faircent.