Banks, NBFCs may need IT overhaul to meet RBI co-lending norms: Bankers

Bankers say RBI's co-lending draft norms may require significant IT upgrades and clarification on the CLM 2 model to ensure compliance and operational readiness

Draft guidelines on colending, if they take effect in their current form, require information-technology (IT) systems to be beefed up, according to banks and non-banking financial companies (NBFCs).

 

The Reserve Bank of India (RBI) had issued the draft guidelines in April.

 

The regulator extended the scope of colending to all regulated entities and also made it applicable to non-priority sectors. 

 

The move is to enhance regulatory clarity, improve credit flow, and ensure real-time information about borrowers as colending practices evolve beyond traditional models. 

 

The model also aims to enhance credit flow to underserved sectors.

 

“According to the guidelines, the origination