Latest news with #InterCreditorAgreement
Time of India
2 days ago
- Business
- Time of India
Banks back status quo on co-lending
New Delhi: Banks have reached out to the Reserve Bank of India (RBI) suggesting continuing with the current co-lending model with non-banking finance companies (NBFCs). The RBI has sought suggestions on draft guidelines on Co-lending Arrangements Directions, 2025 issued in April, said officials aware of the developments. Under the proposed draft guidelines, the RBI has suggested restricting the co-lending model to where both a bank and NBFC jointly originate and disburse loans. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Leading a New Era of Innovation with AI: An Interview With Dr Marcus Weller, Founder and CEO - TechBullion TechBullion Undo Under the current co-lending model (CLM-2), NBFCs originate loans from their books and later assign part of the loan to the bank. This helps NBFCs maintain liquidity and speed up the process. The RBI now wants to shift to CLM-1, where both bank and NBFC disburse loan jointly from the outset. "We want both models to exist and the decision should be left to individual banks and other regulated entities," said a bank executive on suggestions made last month through the Indian Banks' Association . Live Events An email sent to the RBI did not elicit a response until press time. "Each single loan under the arrangement shall be shared among the funding regulated entities right from the time of first disbursement. This shall be done on the basis of a non-discretionary ex ante Inter Creditor Agreement with joint nature of rights," the RBI noted in its draft guidelines. Lenders have reasoned that at present around 80% of co-lending is done through CLM-2, which gives the banks a choice to pick loan portfolios they want to fund. According to a report by CareEdge Ratings, each loan under the arrangement will be shared among the funding REs right from the first disbursement. "Transactions currently being carried out under the CLM-2 model are expected to shift to the direct assignment (DA) model," it said.
Business Upturn
02-05-2025
- Business
- Business Upturn
Bajaj Hindusthan Sugar lenders sign Inter Creditor Agreement for debt resolution
By Aditya Bhagchandani Published on May 2, 2025, 09:45 IST Bajaj Hindusthan Sugar Limited (BHSL) on Friday informed the stock exchanges that its lenders have officially signed the Inter Creditor Agreement (ICA) on April 28, 2025, as part of the debt resolution framework under the relevant Reserve Bank of India (RBI) circular. The communication was received by the company from State Bank of India on May 1, 2025, and has been disclosed in compliance with Regulation 30 of SEBI's Listing Obligations and Disclosure Requirements (LODR) Regulations, 2015. This ICA marks a key step forward in resolving BHSL's outstanding debt issues, enabling a coordinated approach among lenders. The agreement allows banks and financial institutions to work together on restructuring strategies while maintaining collective oversight and decision-making power. The company has not disclosed the total amount involved under the resolution plan or details of the restructuring process yet. Disclaimer: The information provided is based on stock exchange disclosures and should not be considered financial or investment advice. Aditya Bhagchandani serves as the Senior Editor and Writer at Business Upturn, where he leads coverage across the Business, Finance, Corporate, and Stock Market segments. With a keen eye for detail and a commitment to journalistic integrity, he not only contributes insightful articles but also oversees editorial direction for the reporting team.
