Reserve Bank of India (RBI) has proposed to overhaul its existing co-lending guidelines by extending them to all regulated entities (REs) and across all loan segments, not just priority sector lending (PSL). The extant guidelines on co-lending are applicable only to arrangements between banks and NBFCs for priority sector loans. In light of the evolution of such lending practices, and the potential of such lending arrangements in catering to the credit needs of a wider segment in a sustainable manner, it has been decided to expand the scope for co-lending and issue a generic regulatory framework for all forms of co-lending arrangements among REs. The draft guidelines are being issued for public comments.
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