Co-lending 2.0 gains ground, but earlier avatar continues to cast a shadow

Almost seven years after it was rolled out, the Reserve Bank of India (RBI) has hit the reset button on co-lending. The new draft framework goes beyond banks and non-banking financial companies (NBFCs) to cover all regulated entities (REs), and segments outside priority-sector loans.

 

Will version 2.0 fire?

 

The reality is that co-lending did not take off because banks and NBFCs had to dance around issues after blowouts in shadow banking, and iron out the finer aspects of the model. And even now, there’s no data from Mint Road on the outstanding loans under this arrangement. A report by Crisil