By Ankur Mishra,
The Reserve Bank of India (RBI) on Friday allowed housing finance firms (HFCs) to collaborate with banks for precedence sector lending beneath co-origination mannequin. In 2018, RBI had put in place a framework for co-origination of loans by banks and non-banking monetary firms (NBFCs). However, HFCs weren’t allowed to co-lend with banks beneath this mannequin. Lenders consider that transfer from RBI might convey down rates of interest for HFCs. Although, this mannequin has not taken a broad form since inception, bankers mentioned that newest transfer from RBI might convey better of banks and NBFC collectively.
Dinesh Kumar Khara, chairman, State Bank of India (SBI), mentioned that the choice to operationalise the co-origination mannequin is true because it brings the most effective of banks and NBFC collectively. This will certainly enhance the attain of the monetary sector at such a important level, he added.
In an interplay with CNBC TV 18, S S Mallikarjuna Rao, MD and CEO, Punjab nationwide Bank (PNB), mentioned the rate of interest might come down for loans given by housing finance firms because of co-lending. Although, co-lending has not taken a broad form since 2018, however we anticipate it to go little additional no less than in housing phase, he additional mentioned.
Some of the housing finance firms consider that co-lending mannequin will assist them to broaden leverage capacities. Hardayal Prasad, MD and CEO, PNB Housing Finance, mentioned that extension of co-lending mannequin by the RBI will assist broaden leverage capacities of the HFCs and unlock worth for us.
However, not all housing finance firms could also be eager to avail the power of co-lending. Siddhartha Mohanty, MD & CEO of LIC Housing Finance, mentioned, “ We are not keen on co-origination as of now, as we already have a big presence across geographies.” Mohanty additionally highlighted shortcomings of co-lending mannequin. “Banks and NBFCs have different risk appetite, and risk assessment differs for both parties.” There must be convergence for the duration of time, solely then co-lending will progress, Mohanty mentioned.
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