Public sector banks Bank of Baroda on Monday announced the launch of an end-to-end digital platform to facilitate co-lending of loans in partnership with NBFCs. The platform will provide seamless integration between the Bank and multiple NBFC partners to strengthen, accelerate and simplify the co-lending process.
The company said in a statement that the platform uses rules-based algorithms for underwriting, enables credit score checks, enables co-lending product offerings for retail, MSMEs and agriculture and increases process efficiency.
The digital co-lending platform has state-of-the-art capabilities to handle both Option 1 (non-discretionary) and Option 2 (discretionary) co-lending models for secured and non-secured products in accordance with the latest RBI guidelines. on the co-lending model, he added.
Bank of Baroda Executive Director, Vikramaditya Singh Khichi said, “The digital co-lending platform will pave the way for both Bank of Baroda and our NBFC partners to integrate and enable lending to borrowers with a Improved TAT. Co-lending is a priority area for the Bank and we believe this state-of-the-art platform will help achieve important milestones in the years to come. The Bank is aiming to partner with at least 10 NBFCs and also build a co-loan portfolio of Rs 10,000 crore through the digital platform over the next two years.”
Meanwhile, Akhil Handa, Chief Digital Officer, Bank of Baroda, added, “The digital co-lending platform is an agile technology-driven multi-dimensional solution that provides an end-to-end solution for complex accounting issues. which are common under co-loan. Features such as dedicated escrow management and collection mechanism make the platform unique and best in class, providing a more efficient loan management cycle.”
Co-lending is a win-win situation for all three stakeholders, namely clients, partners and the Bank. It provides last mile connectivity by enabling banks to reach new customer segments and improve credit flow. It allows NBFCs to access the bank’s low cost of funds while offering loans to customers at a lower return on investment.