• On 16th May, 2024, the Finance Ministry asked the State Bank of India to form a committee to tackle co-lending issues.
  • Co-lending/Co-origination is an arrangement where multiple lenders partner to provide loans to borrowers.
  • This helps increase lending capacity and reduces risk for individual lenders.
  • As per RBI, banks and NBFCs can co-lend loans to priority sectors, with a minimum 20% credit risk on NBFCs, and the rest on banks.
  • Banks are not allowed to enter into co-lending arrangement with an NBFC belonging to the promoter ....
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