State Bank of India (SBI) is set to launch co-lending business model in collaboration with four to five non-banking finance companies (NBFCs), a bank official told PTI.
Currently, the state-owed lender is working on the technological integration, following which, the priority sector lending service will be launched.
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SBI deputy managing director Sujit Kumar Varma told the news agency that the co-lending model will be completely automated, from approving applications to loan disbursement.
Varma said: “We are close to launch co-lending financing model with NBFCs in line with the Reserve Bank of India (RBI) guidelines.
“We will tie-up with 4-5 medium to large-sized NBFCs and it would be finalised in 30-40 days.”
SBI will have an exposure of around 70%-80% under the co-lending model, while the remaining will be with the NBFCs.
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By GlobalDataLast year, RBI introduced the framework for co-origination of loans by banks and NBFCs in the priority sector. The move was part of the plan to increase credit flow to productive sectors.
Varma said that the introduction of co-lending business model will help SBI to achieve its priority sector lending target.
Last month, SBI was reported to be planning to sell a part of its stake in the SBI Cards Payment and Services (SBI Cards), its credit card joint venture (JV).
The lender aims to raise around $724m-$868m through the sale.
