Source: Financial Express
Context:
The Central Bank of India has entered into a co-lending partnership with IIFL Finance to expand credit access and offer loans at competitive interest rates under the guidelines of the Reserve Bank of India.
What is the Co-Lending Arrangement?
Co-lending is a model where banks and non-banking financial companies (NBFCs) jointly provide loans to borrowers by combining their strengths:
- Banks provide lower-cost funds.
- NBFCs contribute last-mile customer reach and loan origination capabilities.
This framework operates under the Co-Lending Arrangements (CLA) guidelines issued by RBI, revised in November 2025.
Key Features of the Partnership
- Loan Origination: IIFL Finance will source and originate loan proposals through its retail network.
- Joint Credit Assessment: Both lenders will evaluate loan applications based on jointly defined credit parameters.
- Blended Interest Rate: Borrowers will receive loans at competitive blended rates due to combined lending.
- Loan Servicing: IIFL Finance will manage loan servicing and customer interaction during the loan lifecycle.
