Policy on Co-Lending by Banks & NBFCs to Priority Sector (Hindi)

Reference: INDIANBA/202603011801091826

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Description

Policy on Co-Lending by Bank and NBFCs/HFCs A. BACKGROUND: 1.1 The Reserve Bank of India (RBI) had issued guidelines on Co-Origination of Loans by Bank and NBFCs for lending to priority sector vide notification dated 21.09.2018. All Scheduled Commercial Banks (except RRBs and Small Finance Banks) were permitted to engage with NBFC-ND-SIs to co-originate loans for creation of Priority Sector Assets, and share risks and rewards. RBI had instructed Banks/NBFCs to formulate Board approved policy for entering into a co-origination agreement. 1.2 Based on the feedback received from the stakeholders and to better leverage the respective comparative advantages of the Banks and NBFC/HFCs in a collaborative effort, RBI decided to provide greater operational flexibility to the lending institutions, while requiring them to conform to the regulatory guidelines on outsourcing, KYC, etc. 1.3 Reserve Bank of India had released guidelines on Co-Lending Model vide their circular No. FIDD.CO.BC. No.8/04.09.01/2020-21 dated 05.11.2020. The primary focus of the revised scheme, rechristened as “Co-Lending Model” (CLM), is to improve the flow of credit to the unserved and underserved sector of the economy and make available funds to the ultimate beneficiary at an affordable cost, considering the lower cost of funds from banks and greater reach of the NBFCs. The RBI Circular Dt 05.11.2020 now allows Banks to co-lend with all registered HFCs also. The said circular supersedes the RBI notification on Co-Origination of Loans dated 21.09.2018. However, any loans outstanding in terms of the earlier circular would continue to be classified under priority sector till their repayment or maturity, whichever is earlier. 1.4 As per RBI guidelines, banks shall formulate a board approved policy for entering into CLM and place the approved policy on the Bank’s website. Based on the approved policy, a master agreement shall be entered into between the two partner institutions (Bank and NBFC/HFC) which sh

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Tender Details

• Published 01 Mar 2026
• Closing N/A