Banks favour direct assignment over co-lending

Despite the recent relaxation in co-lending norms, banks are likely to maintain their preference for direct assignment with non-banking financial companies (NBFCs) rather than colending arrangements.

- ANUPREKSHA JAIN

Industry experts suggest that while co-lending volumes among NBFCs are expected to grow, driven by operational synergies and flexible structures, banks will continue to favour direct assignment, said industry experts.

“T think we will see a lot more business move to direct assignment rather than co-lending in the current environment,” said Jairam Sridharan, managing director and chief executive officer (CEO), Piramal Enterprises, in the post-earnings call.

“But one area in which you will see some development and growth is NBFC-to-NBFC co-lending but in NBFC-to-bank colending you might see a decline,” he added.