Will co-lending in new avatar fly? It may, but not in a way it was imagined

One problem that is yet to be fully resolved is how to marry the low-cost funds of banks with the lower operational costs of NBFCs, and pass on the benefit to borrowers through a blended rate

The new co-lending model between banks and non-banking financial companies (NBFCs) may not be the newest game in town, but has the potential to be a game-changer all the same. The Reserve Bank of India (RBI) has allowed banks to team up with NBFCs to provide loans to the priority sector.
 

In an upgrade over September 2018, when the idea was flagged off, banks are also permitted to co-lend with all registered NBFCs, including housing finance companies.
 

However, it’s only now that the building blocks are being foregrounded — the principals involved took time to dance around the finer aspects