KVB Bank and Cholamandalam Investment announced a Co-Lending Partnership

Karur Vysya Bank and Cholamandalam in co-lending pactOn March 10, 2021, Karur Vysya Bank(KVB)and Cholamandalam Investment and Finance Company Limited (Chola), the financial services arm of the Murugappa Group launched their co-lending business partnership to make new customers all over India with technology from Nucleus Software.

Objective of the co-lending:

  • To lower the cost of capital and open new markets by enabling new loans at finer rates.
  • Using technology to enable seamless integration with multiple partner banks.
  • Chola will offer KVB to reach new customers by targeting high-value loan segments such as construction equipment and commercial vehicles.

Co-Lending Model (CLM):

Aim:

To improve the flow of credit to the unserved and underserved sector of the economy and make available funds at an affordable cost.

Introduced: 

On November 5, 2020, the Reserve Bank of India (RBI)announced this scheme, under which banks will be permitted to co-lend with all registered NBFCs (including HFCs) based on a prior agreement.

Benefits:

  • NBFCs shall be required to retain a minimum of 20% share of the individual loans
  • It will not apply to foreign banks with less than 20 branches.
  • It enables banks to meet their priority sector lending target.

Recent Related News:

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.

About Cholamandalam Investment and Finance Company Ltd (Chola):

Establishment– 1978
Company Location – Chennai, Tamilnadu
Chairman – Vellayan Subbiah

About Karur Vysya Bank (KVB):

Establishment– 1916
Headquarters– Karur, Tamil Nadu.
Managing Director (MD) and Chief Executive Officer (CEO)- B Ramesh Babu
Tagline – Smart Way to Bank





Exit mobile version