New Delhi, Aug 13
Reserve Bank of India's (RBI) revised directions on co-lending will boost the transparency in the lending space by strengthening disclosure requirements and expanding regulatory oversight beyond banks and NBFCs, a report said on Wednesday.
All forms of loans will fall under the regulatory oversight compared with only priority sector loans currently, Crisil Ratings said in the report.
"Co-lending is seen as a win-win for NBFCs and banks alike, as it allows sharing of risk and rewards from loans they jointly extend to borrowers. For NBFCs, it enables access to bank funding and diversification in resource mobilisation avenues. For banks, on the other hand, it provides optimal access to harder-to-reach customers and geographies," the report said.
"Moreover, enhanced disclosure requirements on a quarterly or annual basis, such as a list of co-lending partners, weighted average rate of interest, fees charged or paid, details of default loss guarantee (DLG), should improve transparency and benefit all stakeholders.”
The provision of allowing originating REs to provide DLG up to 5 per cent of loans to all forms of lending, as against only for digital lending, will broaden the sharing of risk and rewards among co-lending partners. The directions are applicable from January 1, 2026, or from any earlier date as decided by an RE as per its internal policy.