Q. Consider the following statements regarding “Co-Lending Model of Loan”:
1.It is developed by RBI to address the flow to credit to un-served sectors of the economy.
2.NBFC is the originator in Co – lending while a bank is where the major portion of the loan rests.
Which of the statements given above is/are correct?

[A] 1 only

[B] 2 only

[C] Both 1 and 2

[D] Neither 1 nor 2

Answer: C
Notes:

Explanation: Co-lending is an arrangement where the loan origination is by one entity usually non-banking financial company (NBFC) but the risk is shared by two entities (NBFC and banks).

  • NBFC is the originator while a bank is where the major portion of the loan rests.
  • Co-lending model is developed by RBI to address the flow to credit to un-served sectors of the economy.

Source: FORUMIAS

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