The RBI (Co-Lending Arrangements) Directions 2025 to provide a comprehensive framework governing co-lending between regulated entities (REs), including commercial banks (excluding SFBs, RRBs, LABs), All-India Financial Institutions, and NBFCs (including Housing Finance Companies).
— It clarifies that co-lending involves formal agreements between an originating RE and a partner RE to jointly fund loan portfolios with risk and revenue sharing. The key provisions include a minimum 10% loan share to be retained by each RE, detailed disclosure of roles in loan agreements, adherence to KYC norms, and a mandatory escrow mechanism for fund flows. The co-lending loans will follow borrower-level asset classification rules, and any default by one RE must be mirrored in the partner RE’s books. Digital lending remains governed by RBI’s Digital Lending Directions, but if such loans involve co-lending, both frameworks apply.