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Co-lending Partnership between HDFC & Indiabulls HFL 

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HDFC enters into co-lending partnership with Indiabulls Housing Finance

On April 21, 2021, Housing Development Finance Corporation (HDFC) Ltd and Indiabulls Housing Finance Limited (Indiabulls HFL) entered into a strategic co-lending partnership to offer housing loans to homebuyers.

  • The loans under the co-lending will be in the funding ratio of 80:20 in which 80% of the loan is with HDFC’s and 20% with Indiabulls HFL’s.
  • Indiabulls will service the loan account throughout the life cycle of the loan and it holds 20% of the credit risk by way of direct exposure.
  • The loans will be offered at a 7-8 per cent prime lending rate.

About RBI’s Framework over Co-lending:

  • In the case of co-lending between NBFC’s and Banks – in September 2018, the Reserve Bank of India (RBI) has mandated to share a minimum of 20% of the credit risk by way of direct exposure on NBFC’s books till maturity and the balance on the bank’s books.
  • But RBI has not specified any prohibitions over two Non-Banking Finance Companies (NBFCs) from using the co-lending model.
  • Note – Both HDFC and Indiabulls HFL are NBFCs

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 March 25, 2021, HDFC Bank, was adjudged the ‘India’s Best Bank for Small and Medium Enterprises (SMEs)’ at the Asiamoney Best Bank Awards 2021 of Asiamoney for the transformation of its Micro, Small and Medium Enterprises (MSMEs) business.

About Housing Development Finance Corporation (HDFC):

Establishment –1977
Headquarters – Mumbai, Maharashtra
Managing Director – Ms. Renu Sud Karnad
Vice-Chairman & CEO – Mr. Keki M. Mistry
Tagline – With You, Right Through

About Indiabulls Housing Finance Limited:

Establishment – 2005
Headquarters – Mumbai, Maharashtra
Vice-Chairman & Managing Director – Gagan Banga