Piramal partners ICICI Bank for co-lending

Mumbai: Piramal Finance and ICICI Bank have entered a co-lending partnership to expand access to credit in semi-urban and rural areas. The focus is on home loans and loans against property for middle- and low-income borrowers.

The partnership combines Piramal Finance’s distribution network of 514 branches covering 13,000 pin codes across 26 states with ICICI Bank’s financial expertise. The aim is to reach borrowers in Tier 2 and Tier 3 cities, including MSMEs, through competitive rates and products suited to local needs.

The co-lending agreement comes a day after the company said that it has received a licence from the RBI to operate as a non-banking finance company. The company was hitherto operating under a housing finance company licence that was given to the erstwhile DHFL.

Under the co-lending framework, banks and NBFCs, including HFCs, jointly originate loans based on a pre-defined agreement. Banks fund 80% of the loan amount, while NBFCs retain 20%. Risk and returns are shared proportionally. NBFCs manage customer interactions, loan documentation, and transaction routing through escrow accounts. Both parties are required to have board-approved policies and ensure compliance with regulatory norms. NBFCs cannot finance their share using funds from partner banks. Banks can classify their share under priority sector lending. If the partnership ends, a continuity plan must be in place to maintain uninterrupted service.

The model allows banks to access underserved markets through NBFCs, offering borrowers blended interest rates and broader access to credit. The partnership supports the broader goal of strengthening India’s credit ecosystem and promoting financial inclusion.

Piramal Finance follows a 'High Tech + High Touch' model and currently serves over 4.5 million customers. It offers home loans, loans against property, used car loans, and small business loans to underserved segments. In wholesale lending, it provides construction finance, structured debt, and senior secured debt to the real estate and non-real estate sectors.


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