PNB Housing Finance has tied up with YES Bank for a strategic co-lending service that will facilitate retail home loans at competitive rates.

The two institutions will synergise capabilities to provide an efficient and seamless experience to existing and new retail home loan customers, says PNB Housing Finance in a regulatory filing. This strategic co-lending agreement will offer “convenient and customised retail loans to homebuyers at competitive interest rates”.

PNB Housing and YES Bank plan to do the due diligence jointly and co-originate the loan at an agreed ratio. PNB Housing will service the customers through the entire loan lifecycle, including sourcing, documentation and collection with an appropriate information-sharing arrangement with YES Bank, says the filing.

In 2020, the Reserve Bank of India (RBI) had allowed co-origination of housing finance companies (HFC) with banks to enable non-banking finance companies (NBFC) and other banking institutions to provide mutually beneficial risk assessment services.

The revised co-lending model, introduced in November 2020, gives lenders more flexibility compared to offering higher credit for the unserved and underserved segments of the population.

“India’s financial sector is witnessing a historical disruption with most banks and NBFCs harnessing the power of new-age technologies to innovate and deliver qualitatively superior products and services to customers. The digital transformation has opened up untapped opportunities in the retail home loan space,” says Rajan Suri, the retail business head at PNB Housing Finance.