RBI allows NBFCs to tie up with Banks and co-lend to priority sector

The Reserve Bank of India (RBI) has permitted all registered non-banking finance companies (NBFCs) to enter into tie-ups with commercial banks and co-lend loans to the priority sector. Under this newly revised guideline called ‘Co-Lending Model’, all NBFCs shall be required to retain a minimum of 20% share of the loan. Priority sector refers to economically weaker sections of the economy.