On February 8, 2021 Bank of Maharashtra(BoM) entered into a co-lending agreement with Non-Banking Financial Company (NBFC), LoanTap Credit Products to extend credit to Micro, Small and Medium Enterprise(MSME) loans.
- Under this agreement, 80% of the loan will be braced by the bank and the remaining 20% by the Loan Tap.
Benefit of the Tie-up
- Already, BoM has partnership with fintech company Atyati Technologies, but is limited to sourcing proposals.
- BoM with this partnership will get faceless sanctions and disbursals using mobile app.
What is a Co-Lending Model?
On November 5, 2020, the Reserve Bank of India (RBI) has revised the loan scheme of the Co-origination Model between Banks and NBFC – Non-Deposit taking – Systemically Important (NBFC-ND-SIs) that was launched in September 2018 and renamed as ‘Co-Lending Model (CLM)’.
To enhance the credit flow to the unserved and underserved sector and make available funds to the ultimate beneficiary at an affordable cost
To provide greater operational flexibility to the lending institution
Under the model, the bank can co-lend with all registered Non-Banking Financial Companies(NBFCs) including Housing Finance Companies(HFCs) to priority sector borrowers based on a prior agreement.
i.It enables banks to meet its priority sector lending target.
ii.It proves to be beneficial to all NBFCs that have wider outreach and customers, who will be facilitated with low cost credit from banks.
iii.It paves way for a loan sanction that is done at the convenience of the borrower. The sanction is done through digital lending platforms, from on-boarding of customers to loan disbursement and monitoring without manual intervention.
Recent Related News:
On January 16, 2021 IIFL Home Finance Ltd and Standard Chartered Bank entered into a co-lending arrangement to extend credit to MSME loans (loan against property). It is to be noted that this is one of the 1st co-lending arrangements in industry after Reserve Bank of India(RBI) launched Co-Lending Model (CLM).
About Bank of Maharashtra(BoM):
i.The Government of India holds 93.33% stake in the bank.
ii.It is the sponsor bank of Maharashtra Gramin Bank
- Aurangabad Jalna Gramin Bank & Thane Gramin Bank was amalgamated into Maharashtra Godavari Gramin Bank.
- Maharashtra Gramin Bank came in to existence on 20th July 2009 after amalgamation of erstwhile Maharashtra Godavari Gramin Bank and Marathawada Gramin Bank
HeadOffice– Pune, Maharashtra
Incorporated on– September 16, 1935
Commenced Operations– February 8, 1936
MD & CEO– A.S Rajeev
Headquarters– Pune, Maharashtra
CEO and Co-Founder– Satyam Kumar