MUMBAI: India’s central bank published final rules for co-lending arrangements between banks and non-bank financial firms on Wednesday, expanding the scope of such partnerships beyond priority sector lending and introducing tighter norms.
The framework, effective January 1, 2026, mandates that the lender retain at least 10% of individual loan exposures on its books and clearly disclose roles and responsibilities to borrowers.
The move aims to provide regulatory clarity and strengthen risk-sharing mechanisms in joint lending portfolios, the Reserve Bank of India said.
Partner lenders are also bound to reflect their share of loans within 15 days of disbursement and restrict default loss guarantees to originating entities, capped at 5% of outstanding loans.
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Asset classification will be borrower-level, so a default flagged by one lender will apply to the other’s exposure as well, the RBI added.
The April draft had allowed broader flexibility, including guarantees by the lender onboarding the borrower.
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