“… The outsourcing of all activities by banks and NBFCs does not diminish their obligations, as compliance with regulatory instructions is theirs exclusively,” the RBI said in a statement to the planned commercial banks and NBFCs. The RBI also stated that immediately after the loan was sanctioned, a letter addressed to the borrower should be sent to the bank/NBFC header concerned. The sector`s priority loans include loans to segments such as agriculture; micro-enterprises, small and medium-sized enterprises; export credits; Education Boxes; Renewable. The Reserve Bank of India (RBI) has worked banks, not banks, as it has found a violation of the code of fair practice by digital platforms acting as the agency of these lenders for the sale of loans. “Immediately after the sanction, but before the execution of the loan agreement, the letter of sanction is addressed to the borrower on the head of the letter of the bank/NBFC concerned,” the central bank said. While banks and non-bank financial companies (NBFCs) are asked to disclose the names of active agents on their websites, digital credit platforms have been asked to disclose to their clients in advance the names of the bank/NBFC on whose behalf they are lending. Under the co-lending model (CLM), banks can, on the basis of a prior agreement, grant loans jointly with all registered NBFCs (including HFCs), the RBI said, adding that “lending banks will take their share of credit on a back-to-back basis.” According to an RBI statement, NBFCs will be the only interface for customers and will enter into a credit contract with borrowers. The agreement should clearly include the characteristics of the agreement as well as the roles and responsibilities of NCB and banks. Banking supervision has now established standards such as the letter of sanction for loans to the borrower on the head of the letter of the lender concerned.
The framework contract may provide that banks take into their books, under the terms of the agreement, their share of individual loans taken out by the NCBs, or that they retain the power to refuse, depending on their due diligence, certain loans, under certain conditions, before being included in their books. The Reserve Bank of India (RBI) has authorized all registered non-bank financing companies (including housing finance companies) to establish links with planned commercial banks (SCB) to co-finance loans for the creation of priority sector assets. With respect to LMCs, banks may, on the basis of a previous agreement, provide loans jointly with all registered NBFCs (including HFCs). MUMBAI: The reserve bank on Thursday introduced a co-credit model (CLM) program under which banks can lend to priority borrowers in the sector on the basis of a pre-agreement. A copy of the loan agreement, along with a copy of all investments covered in the loan agreement, must be made available to all borrowers at the time of the penalty/payment of the loans, according to bank supervision. Under previous Guidelines for September 2018 on the “co-origin of loans by banks and NBFCs”, only systemic and non-monetary non-bank financing companies (NBFCs) could enter into agreements with banks for co-clearing loans.