ENA Sectors 2025-08-11 14:39:26 <p><span style="font-size:14px"><strong>Mumbai, Aug 11 (KNN) </strong>The Reserve Bank of India (RBI) has released its final guidelines for co-lending, which will be effective from January 1, 2026.</span></p> <p><span style="font-size:14px">The rules aim to improve transparency, risk-sharing, and borrower protection in partnerships between banks and non-banking financial companies (NBFCs).</span></p> <p><span style="font-size:14px">However, industry experts believe these norms will also raise operational costs for lenders, especially smaller NBFCs.</span></p> <p><span style="font-size:14px">A key change is the mandatory use of an escrow account for all transactions. Lenders must update their loan share in records within 15 days of disbursement to keep the co-lending status valid.</span></p> <p><span style="font-size:14px">The guidelines also require stronger Know Your Customer (KYC) processes, detailed disclosures to borrowers, and regular internal audits.</span></p> <p><span style="font-size:14px">The RBI has made it compulsory for lenders to retain at least 10% of every loan on their own books. This ensures both parties share the risk and are equally invested in the loans performance.</span></p> <p><span style="font-size:14px">Borrowers will now be charged a blended interest rate, calculated based on the weighted average rate of all lending partners.</span></p> <p><span style="font-size:14px">All fees, charges, and interest rates must be clearly mentioned in Key Fact Statements and the Annual Percentage Rate (APR) for borrowers.</span></p> <p><span style="font-size:14px">This will make loan terms easier to understand and reduce the risk of hidden costs.</span></p> <p><span style="font-size:14px">While these measures are expected to strengthen trust and accountability, they may discourage smaller NBFCs from participating in co-lending arrangements.</span></p> <p><span style="font-size:14px">The added cost of compliance, escrow management, and technology integration could make direct lending or loan assignments more attractive alternatives for such players.</span></p> <p><span style="font-size:14px">Overall, the new framework strengthens the co-lending system but also raises the bar for operational readiness in the Indian credit market.</span></p> <p><em><strong><span style="font-size:14px">(KNN Bureau)</span></strong></em></p> 43121 https://knnindia.co.in/news/newsdetails/sectors/rbis-new-co-lending-rules-effective-january-2026-mandate-escrow-accounts-risk-sharing 2025-08-11 14:39:26 knnindia.co.in