In September this year, Reserve Bank of India has released specific guidelines on co-origination of loans by banks, non-deposit taking NBFCs in the Priority Sector.
- This is mainly aimed to influence the smooth movement of NBFCs in helping the banks in meeting their Priority Sector targets.
- The Co-origination arrangement is expected to pave way for “Joint contribution of credit by both lenders”.
- Also, it would pave way for sharing of risks by both Banks and NBFCs as per RBI reports.
- Priority Sector lending involves
- Loans to Agriculture,
- Micro Enterprises,
- Social Infrastructure,
- Education and
- Renewable Energy.