You borrowed through a slick fintech app, the money landed in your account, and a week later your phone buzzed with welcome messages from BOTH a public-sector bank AND an NBFC you had never heard of. EMI reminders now come from two names. So who is actually your lender, who do you pay, and who do you complain to if something goes wrong? If this is you, you are inside a co-lending arrangement, and the RBI (Co-Lending Arrangements) Directions, 2025 give you a clear set of rights.
Your borrower-rights checklist in a co-lending loan
Co-lending is an arrangement where two RBI-regulated entities, typically a bank and a Non-Banking Financial Company (NBFC), jointly fund a single loan to you, the borrower. The bank usually brings cheaper money and the NBFC (often working through a fintech app) brings reach into smaller towns and faster underwriting. From your side it should feel like one loan, with one rate and one EMI, even though two balance sheets are funding it behind the scenes. The RBI (Co-Lending Arrangements) Directions, 2025, notified on 6 August 2025 and in force from 1 January 2026, exist to make sure that single-loan experience is honest and transparent.
In a co-lending arrangement, two regulated entities (REs) agree in advance how to share each loan. One is usually the originating RE that sources and onboards you, and the other commits to taking its share of the loan on a back-to-back basis. Under the 2025 Directions, each RE must keep a minimum of 10 percent of every individual loan on its own books. This is down from the earlier 20 percent floor that applied to the older priority-sector co-lending model, and it is meant to keep both lenders with real “skin in the game” so neither can simply originate and dump the loan.
The respective shares must be reflected in the books of both REs within 15 calendar days of disbursement. The 2025 framework also widens who can co-lend: it now covers commercial banks (excluding small finance banks, local area banks and regional rural banks), all-India financial institutions, and all NBFCs including housing finance companies, and it is no longer limited to priority-sector lending. For you, none of this back-office plumbing should change your EMI. It only changes who carries the loan internally.
The single most important borrower protection is the blended interest rate. Instead of the bank charging its rate on its share and the NBFC charging a higher rate on its share, you are charged ONE rate that is the weighted average of both lenders' rates, weighted by how much each one funded.
Worked example (illustrative numbers only):
| Lender | Funding share | That lender's rate | Weighted contribution |
|---|---|---|---|
| Bank | 80% | 11% | 8.8% |
| NBFC | 20% | 16% | 3.2% |
| You pay (blended) | 100% | 12.0% |
So even though part of your loan is funded at 16 percent, your headline rate is 12 percent, because most of the money came from the bank at 11 percent. The Directions specifically close the old loophole where an NBFC could price the whole loan high and quietly pocket the margin from the bank's cheaper funds. If either lender changes its rate later, the blended rate must be recalculated, your KFS updated, and the change communicated to you.
Before any money is disbursed, you must receive a Key Fact Statement. Building on RBI's KFS norms for loans and advances, in a co-lending loan the KFS must clearly disclose:
If a charge is not in the KFS, treat it as a red flag and question it in writing before you sign.
A co-lending arrangement does not mean your complaint gets bounced between two lenders. The Directions require a clearly defined grievance mechanism with a single point of contact for you, usually the entity that interfaces with you. Steps to follow:
If you are unsure which regulator owns your specific complaint, see our hub on which regulator to complain to. You can also use our free AI complaint and RTI drafting tool to structure a clean written grievance.
For app-based loans specifically, also read our companion guide on digital lending, DLG and FLDG borrower rights, and if your loan is secured, our gold loan RBI rules and borrower rights guide.
Your lenders are the two RBI-regulated entities named in your Key Fact Statement, typically a bank and an NBFC. A fintech app in the middle is usually only a sourcing or service partner, not the lender. The KFS will tell you each lender's name and funding share.
You pay a single blended interest rate, which is the weighted average of both lenders' rates based on how much each funded. You never pay the two rates separately, and the blended rate plus all charges must be shown as the APR in your KFS before disbursement.
The Reserve Bank of India (Co-Lending Arrangements) Directions, 2025 were notified on 6 August 2025 and come into force from 1 January 2026. A regulated entity may adopt them earlier under its own internal policy.
No. The Directions require a clear grievance mechanism with a single point of contact for you. If your complaint is not resolved within 30 days, you can escalate it free of cost to the RBI Ombudsman under the Reserve Bank Integrated Ombudsman Scheme.
Not inherently. Both funders are RBI-regulated and bound by the same fair-practices, recovery and privacy rules as any other loan. The main thing to watch is disclosure: make sure your KFS names both lenders, shows the blended rate, and includes every charge inside the APR.
Start with The RTI Playbook for using information rights against any institution, and read the RTI Act to understand how to demand records and accountability from public authorities.