RBI1 min read
Co-Lending
An arrangement under RBI's Co-Lending Model (CLM) where banks and NBFCs jointly originate and fund priority sector loans, with the bank taking at least 80% of the loan on its books and the NBFC retaining 20%, combining NBFC's reach with bank's lower cost of funds.
Last updated: 17 May 2026
Frequently Asked Questions (FAQs)🔗
Q1. What is Co-Lending in Indian corporate law?▼
An arrangement under RBI's Co-Lending Model (CLM) where banks and NBFCs jointly originate and fund priority sector loans, with the bank taking at least 80% of the loan on its books and the NBFC retaining 20%, combining NBFC's reach with bank's lower cost of funds.
Q2. Why is Co-Lending important for compliance?▼
Co-Lending is governed by the Reserve Bank of India under applicable banking and monetary policy frameworks. Understanding this concept is essential for ensuring regulatory compliance, avoiding penalties, and making informed corporate decisions in India.
Q3. Who should know about Co-Lending?▼
Co-Lending is relevant for company secretaries, compliance officers, chartered accountants, corporate lawyers, board members, and all professionals dealing with RBI regulatory matters in India.
Contextual Analysis & Regulatory Updates🔗
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