Shashtrarth 10: Cool with Co-lending - Analysing Scenario after RBI FAQs on PSL

The Reserve Bank of India has recently amended certain provisions of the PSL Master Directions and along with it has also notified Frequently Asked Questions (FAQs) on priority sector loans. These FAQs include a dedicated section that addresses concerns related to co-lending by banks and NBFCs, of course, for PSL loans. These FAQs provide clues on aspects such as risk retention, recourse on the originating co-lender, back-to-back arrangements, manner of disbursal, due diligence by banks, and other issues around co-lending.

Given that the Co-lending Guidelines for PSL loans is the only regulatory framework for reference for any co-lending arrangement either between banks and NBFCs or two NBFCs for PSL as well as non-PSL, the amendments become crucial for analysis.

In this Shashtratha session, we intend to discuss the grey areas around co-lending in light of the clarifications provided by the regulator vide its FAQs.

We have also made our own comprehensive FAQs on Co-lending, in light with RBI’s FAQs which can be read through the below link: https://vinodkothari.com/2024/07/faqs...

Read our publication The Vikas Path: The Securitised Path to Financial Inclusion here: https://vinodkothari.com/2024/05/vika...
which includes curated resources on securitisation and co-lending

You can also access our resource centre on co-lending here: https://vinodkothari.com/co-lending/