As part of their collaboration, RBL Bank is set to merge its financial expertise with Piramal Finance’s technology-enabled loan processing system, named ‘High Tech + High Touch’. RBL Bank currently has a network of over 2,000 touchpoints, while Piramal Finance, which is a subsidiary of Piramal Enterprises, operates 508 branches across 13,000 pin codes in 26 states. The announcement represents Piramal Finance’s third co-lending collaboration, with the company entering similar ventures with Axis Bank and Central Bank of India. Piramal Finance’s agreement with the Central Bank of India was set to allow the two organisations to offer loans to middle and low-income borrowers. Also, by combining the financial institution’s branch network and the company’s technological approach to lending, they intended to scale digital efficiency and deliver customised services.
Initiated by the Reserve Bank of India (RBI), the co-lending model (CLM) seeks to scale credit flow to underprivileged sectors of the economy by facilitating collaboration between banks and non-banking financial companies (NBFCs). The model enables financial institutions to utilise their lower cost of funds while NBFCs use their reach, especially in underserved regions.
The alliance forged between RBL Bank and Piramal Finance is set to centre on addressing the credit gap for micro, small, and medium-sized enterprises (MSMEs) and home loan borrowers, especially for those in Tier 2 and Tier 3 markets. The two companies plan to offer loans personalised to meet the needs, demands, and preferences of underserved borrowers. Commenting on the news, representatives from RBL Bank mentioned that the collaboration with Piramal Finance advances their shared commitment to boosting financial inclusion across the region.
Furthermore, RBL Bank and Piramal Finance aim to leverage their combined customer reach, underwriting practices, and credit assessment tools to provide competitive interest rates and formal credit access.
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