RBI co-lending directions 2025: an operations checklist for banks and NBFCs

The short version

RBI notified the Reserve Bank of India (Co-Lending Arrangements) Directions, 2025 on 6 July 2025. They apply from 1 January 2026, or earlier if a lender’s own policy adopts them sooner. They cover commercial banks (other than small finance banks, local area banks and regional rural banks), all-India financial institutions, and NBFCs including housing finance companies. Consortium lending, multiple banking and syndication are outside the scope.

The bigger shift is coverage. The directions apply to co-lending between regulated entities generally and to all kinds of loans, not just priority-sector loans.

What the directions require

• Each lender keeps at least 10% of every individual loan on its own books.
• The partner lender has to record its share of the loan within 15 days of disbursement.
• Borrowers pay a blended interest rate, the weighted average of each lender’s rate, and changes must be communicated promptly.
• Any default loss guarantee is capped at 5% of the outstanding loans.
• Transactions can run through an escrow account, and the agreement has to spell out how funds are allocated.
• Borrowers get clear disclosures: who does what, a single point of contact, and a Key Facts Statement.
• Each lender reports its own share to the credit information companies.
• Credit policies must be updated to cover co-lending: exposure limits, borrower segments, partner due diligence and grievance handling.

Where operations feel it

Read that list again with an operations hat on. Two lenders, one borrower, one loan split between them, a 15-day clock on booking, a retention floor that must hold loan by loan, a guarantee cap to watch, and separate bureau reporting. Every one of those is a control somebody has to run and later prove.

On spreadsheets, this is where things slip. The 15-day booking window gets missed because the partner is waiting for a file. Nobody notices one loan dipping below 10% retention after a restructure. The DLG calculation lives in one analyst’s workbook. It works until the first audit or the first dispute between partners.

A practical checklist

• Update the board-approved credit policy for co-lending and record the approval.
• Keep a register of partner lenders, with due diligence documents and review dates.
• Track every co-lent loan with both lenders’ shares, and flag any loan that drops below 10% retention.
• Run a 15-day timer from disbursement for the partner’s booking, with escalation before it lapses.
• Monitor the default loss guarantee against the 5% cap on a portfolio basis.
• Store borrower disclosures and the KFS against each loan, with delivery confirmation.
• Reconcile CIC reporting of each lender’s share.
• Keep an audit trail of approvals on both sides of the arrangement.

Running it without a big system upgrade

Bankers have said publicly that the new norms need IT upgrades. For many NBFCs, that doesn’t have to mean replacing the core system. The co-lending controls above are mostly workflow: registers, timers, approvals, checks and reports.

On a no-code governed platform like Averoic, an NBFC can set up partner onboarding, co-lent loan tracking, the 15-day booking clock, retention and DLG monitoring, and approvals with a full audit trail, and plug it into the existing LMS and accounting systems.

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