Finance Ministry directs SBI to form Committee to Tackle Co-Lending Issues

The Finance Ministry urged the State Bank of India (SBI) to establish a committee to tackle issues in the co-lending model. Following the RBI's approval for banks to co-lend with non-banking finance companies, the ministry aims to enhance credit flow to underserved sectors. \r

The committee, comprising representatives from major banks and non-banking financial services, will address hesitations in entering the co-lending space. Banks seek a first-loss cover to ease participation. CRISIL Ratings projects non-banking financial companies' co-lending book to reach Rs 1 trillion by June 2024, with an annual growth rate of 35-40%. \r

Stakeholders' suggestions for the upcoming budget and 100-day agenda were also discussed during the meeting.