Karur Vysya Bank and Cholamandalam Investment and Finance Company Ltd (Chola), the financial services arm of the Murugappa Group, have announced a co-lending partnership.

The co-lending model is seen as a great opportunity for banks and NBFCs to draw upon each other’s strengths. The pact is expected to help Chola and Karur Vysya Bank expand their reach to new customer segments across the country where Chola has a stronger presence to target high-value loan segments such as construction equipment and commercial vehicles, according to a statement.

“We strongly believe our co-lending partnership with KVB will help us garner market share across segments of customers due to our stronger presence throughout the country. Co-lending is a new direction for Chola, but we are confident that this will soon evolve into a very fruitful partnership model for KVB and Chola,” said Ravindra Kundu, Executive Director, Chola.

Chola enjoys a unique position in the industry today due to its strong customer relationship built over four decades and reliance on an inherent value system. The partnership will help the bank expand its commercial customer base and also provide upselling and cross selling opportunities, said Natarajan J, President and Chief Operating Officer, Karur Vysya Bank.

The model not only allows both companies to scale their portfolio effectively, but also uses an effective composite risk management framework that inculcates the risk appetites of both companies, said the statement.

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