In June 2021, Central Bank of India announced co-lending partnerships with Non-Banking Finance Companies (NBFCs) viz, Indiabulls Housing Finance Limited (Indiabulls HFL) and IIFL Home Finance Limited (IIFL HFL) to offer housing loans under priority sector to homebuyers.
- Indiabulls HFL and IIFL HFL will service the loan account throughout the life cycle of the loan, they will originate and process the retail home loans.
- Central Bank of India will take 80 percent of the housing loan into its book under direct assignment transactions.
- This co-lending is based on Reserve Bank of India’s (RBI) Co-Lending Model (CLM), which was announced by it in November 2020.
Co-Lending Model(CLM):
i.As per RBI’s CLM, banks 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.
ii.Shares under CLM:
- NBFCs– Required to retain a minimum of 20 percent share of the individual loans on their books.
- Co-lending banks– Take their individual loan share on a back-to-back basis in their books. Click here to know more
What is a Co-lending partnership?
Under Co-lending two lender firms will come together to disburse loans. The association will allow firms to source clients, perform credit appraisals, and disburse funds.
Recent Related News:
On April 21, 2021, Housing Development Finance Corporation (HDFC) Ltd and Indiabulls HFL entered into a strategic co-lending partnership to offer housing loans to homebuyers.
About Central Bank of India:
Establishment – 1911
Headquarters – Mumbai, Maharashtra
MD & CEO – M. V. Rao
Tagline – ‘Central’ to you since 1911
About IIFL Home Finance Ltd (IIFL HFL):
IIFL (formerly India Infoline Limited) Home Finance Ltd is a subsidiary of IIFL Finance Limited. IIFL Finance Limited was formerly known as IIFL Holdings Limited.
Headquarters – Gurgaon, Haryana
Executive Director & CEO – Monu Ratra
About Indiabulls Housing Finance Limited (Indiabulls HFL):
Establishment – 2005
Headquarters – Mumbai, Maharashtra
Vice-Chairman & Managing Director – Gagan Banga
