Current Affairs · Banking Regulations
A commercial bank enters into a Co-Lending Model 2 (CLM-2) agreement with a Fintech NBFC to provide personal loans to salaried individuals. The NBFC originates 100 loans on January 1st. The bank reviews these loans and decides to take an 80 percent share in 90 of those loans on January 10th. One of the borrowers in the accepted pool defaults on their first installment due on February 5th. Which of the following correctly describes the regulatory implications of this scenario?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1The bank can ask the NBFC to replace the defaulting loan with a fresh performing loan as per standard co-lending norms.
- 2The bank must have transferred its share of the funds to the NBFC by January 15th to comply with the 15-day transfer rule.✓
- 3The bank must classify its share of the loan as NPA if the borrower remains overdue for 90 days, regardless of the NBFC's action.
- 4The bank is not liable for the default as the loan was sourced by the NBFC and is still within the 90-day grace period.
Correct answer
The bank must have transferred its share of the funds to the NBFC by January 15th to comply with the 15-day transfer rule.
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