This is one of the first co-lending arrangements in the industry after Reserve Bank India’s co-lending guidelines were issued.
“Under this partnership, IIFL Home Finance Ltd and the Standard Chartered Bank will co-originate these loans and the IIFL Home Finance Ltd will service the customers through the entire loan life-cycle including sourcing, documentation, collection and loan servicing,” said Nirmal Jain, Chairman, IIFL Finance.
“Our strategy is two-fold – to digitize all processes and partner with the banks for assignment and co-origination,” he said.
In December IIFL Home Finance had partnered with ICICI Bank to provide affordable housing and MSME loans as a sourcing partner. In October CSB Bank had also partnered with IIFL Finance for sourcing and managing retail gold loan assets.
IIFL Finance is one of India’s leading retail-oriented non-banking finance companies(NBFC) with about 90% of its Rs 41,000 crore loan book under the retail category, the company said in a release.
On November 5, 2020, RBI had announced the co-lending scheme for banks and NBFCs for the priority sector.
Under the model, banks are permitted to co-lend with all registered NBFCs (including housing finance companies) based on a prior agreement.
NBFCs shall be required to retain a minimum of 20% share of the individual loans on their books.
