Final co-lending norms focus on shared responsibility

The Reserve Bank of India (RBI) released final guidelines on co-lending for regulated entities on Wednesday that will divide the responsibility of setting aside 10% each by the two regulated entities.

- FE BUREAU

The Reserve Bank of India (RBI) released final guidelines on co-lending for regulated entities on Wednesday that will divide the responsibility of setting aside 10% each by the two regulated entities. The guidelines will come into effect from January 1.

"Each RE (regulated entity) under a CLA (co-lending arrangement) shall be required to retain a minimum 10% share of the individual loans in its books," the guideline said. Earlier, non-banking financial companies (NBFCs) had to retain a minimum of 20% share of the individual loans on their books while the bank did not have to keep aside anything. Even though the final guidelines have been relaxed, operationally they seem challenging, analysts said.